Gratus Wealth Trims QQEW Stake by $22 Million -- Is Equal-Weight Nasdaq Still Worth Holding?

What happened

According to a recent SEC filing, Gratus Wealth Advisors, LLC, significantly reduced its stake in the First Trust Nasdaq-100 Select Equal Weight ETF (NASDAQ:QQEW), selling 164,630 shares during Q1 2026. The estimated transaction value was $22.3 million, based on the average closing price for the quarter. The quarter-end position value in QQEW declined by $25.0 million, reflecting both the share sale and price movement during the period.

What else to know

• Following the sale, QQEW represents 1.9% of Gratus Wealth Advisors' total AUM -- outside the fund's top five holdings.
• Top holdings after the filing:
  • NYSE: DGRO: $85.5 million (12.4% of AUM)
  • NYSE: MGK: $59.8 million (8.6% of AUM)
  • NYSE: XSMO: $39.6 million (5.7% of AUM)
  • NASDAQ: QQQ: $37.0 million (5.4% of AUM)
  • NYSE: IBDR: $36.3 million (5.2% of AUM)
• As of May 4, 2026, QQEW shares were trading at $139.15, up about 12% over the past year -- underperforming the S&P 500 by roughly 16 percentage points, and trailing its Large Growth category benchmark by roughly 4 percentage points.

ETF overview

ETF snapshot

The First Trust Nasdaq-100 Select Equal Weight ETF (QQEW) tracks the Nasdaq-100 through an equal-weight methodology -- meaning each of the index's roughly 100 holdings receives a similar allocation, rather than concentrating heavily in the largest companies.

• Designed to reduce the mega-cap dominance common in market-cap-weighted Nasdaq ETFs like QQQ.
• Holds a diversified mix of large-cap U.S. growth equities, rebalanced on a rules-based schedule.

What this transaction means for investors

At first glance, selling more than 60% of an ETF position looks significant -- but some context helps put this move in perspective. Gratus is a wealth management firm, and the 13F filing reflects a snapshot of holdings at quarter-end rather than a real-time window into the firm's thinking. The filing alone doesn't tell us why the position was trimmed.

That said, the sale comes against a backdrop of relative underperformance. QQEW has gained about 12% over the past year, but it has lagged the S&P 500 by roughly 16 percentage points over that stretch -- a meaningful gap for any position in a managed portfolio. Equal-weight strategies like QQEW tend to shine when smaller and mid-cap names in the Nasdaq keep pace with -- or outrun -- the mega-cap leaders. In periods where a handful of giants (like the Magnificent 7 stocks) are doing the heavy lifting for the index, an equal-weight approach will naturally trail the cap-weighted alternative.

It’s also worth noting that Gratus still holds a substantial position in the Invesco QQQ Trust (NASDAQ:QQQ) -- $37.0 million -- providing continued Nasdaq-100 exposure through the cap-weighted version of the same index.

For long-term investors, the equal-weight approach offers genuine diversification benefits over time and can limit concentration risk relative to market-cap-weighted funds. But when the market's biggest names are driving returns, the equal-weight trade-off comes at a cost -- and that dynamic has been on full display over the past year.

As for why Gratus trimmed the position -- whether it's QQEW's recent underperformance, a decision to redeploy capital into other parts of the portfolio, or simply routine rebalancing -- we can’t be sure. Whether QQEW's relative underperformance persists will depend largely on how broad -- or narrow -- market leadership turns out to be going forward.

Andy Gould has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.