If you're interested in broad exposure to the Large Cap Growth segment of the US equity market, look no further than the Fidelity Nasdaq Composite Index ETF (ONEQ), a passively managed exchange traded fund launched on 09/25/2003.

The fund is sponsored by Fidelity. It has amassed assets over $7.19 billion, making it one of the larger ETFs attempting to match the Large Cap Growth segment of the US equity market.

Why Large Cap Growth

Companies that fall in the large cap category tend to have a market capitalization above $10 billion. Overall, they are usually a stable option, with less risk and more sure-fire cash flows than mid and small cap companies.

Growth stocks have higher than average sales and earnings growth rates. While these are expected to grow faster than the broader market, they also have higher valuations. Something to keep in mind is the higher level of volatility that is affiliated with growth stocks. Compared to value stocks, growth stocks are a safer bet in a strong bull market, but don't perform as strongly in almost all other financial environments.

Costs

Investors should also pay attention to an ETF's expense ratio. Lower cost products will produce better results than those with a higher cost, assuming all other metrics remain the same.

Annual operating expenses for this ETF are 0.21%, making it one of the cheaper products in the space.

It has a 12-month trailing dividend yield of 0.69%.

Sector Exposure and Top Holdings

ETFs offer a diversified exposure and thus minimize single stock risk but it is still important to delve into a fund's holdings before investing. Most ETFs are very transparent products and many disclose their holdings on a daily basis.

This ETF has heaviest allocation to the Information Technology sector--about 48.70% of the portfolio. Telecom and Consumer Discretionary round out the top three.

Looking at individual holdings, Apple Inc (AAPL) accounts for about 10.95% of total assets, followed by Microsoft Corp (MSFT) and Nvidia Corp (NVDA).

The top 10 holdings account for about 58.67% of total assets under management.

Performance and Risk

ONEQ seeks to match the performance of the NASDAQ Composite Index before fees and expenses. The Nasdaq Composite Index is a stock market index that includes almost all stocks listed on the Nasdaq stock exchange.

The ETF has lost about -5.06% so far this year and is up about 13.43% in the last one year (as of 03/04/2025). In the past 52-week period, it has traded between $60.18 and $79.61.

The ETF has a beta of 1.13 and standard deviation of 22.38% for the trailing three-year period, making it a medium risk choice in the space. With about 1040 holdings, it effectively diversifies company-specific risk.

Alternatives

Fidelity Nasdaq Composite Index ETF carries a Zacks ETF Rank of 3 (Hold), which is based on expected asset class return, expense ratio, and momentum, among other factors. Thus, ONEQ is a good option for those seeking exposure to the Style Box - Large Cap Growth area of the market. Investors might also want to consider some other ETF options in the space.

The Vanguard Growth ETF (VUG) and the Invesco QQQ (QQQ) track a similar index. While Vanguard Growth ETF has $150.46 billion in assets, Invesco QQQ has $316.62 billion. VUG has an expense ratio of 0.04% and QQQ charges 0.20%.

Bottom-Line

Retail and institutional investors increasingly turn to passively managed ETFs because they offer low costs, transparency, flexibility, and tax efficiency; these kind of funds are also excellent vehicles for long term investors.

To learn more about this product and other ETFs, screen for products that match your investment objectives and read articles on latest developments in the ETF investing universe, please visit Zacks ETF Center.

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Fidelity Nasdaq Composite Index ETF (ONEQ): ETF Research Reports

Apple Inc. (AAPL) : Free Stock Analysis Report

Microsoft Corporation (MSFT) : Free Stock Analysis Report

NVIDIA Corporation (NVDA) : Free Stock Analysis Report

Invesco QQQ (QQQ): ETF Research Reports

Vanguard Growth ETF (VUG): ETF Research Reports

This article originally published on Zacks Investment Research (zacks.com).

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