This Tech ETF Jumped 25% in One Year but One Fund Still Sold It Off

On January 15, Guided Capital Wealth Management reported selling its entire holding of 12,639 shares of the First Trust NASDAQ-100 Technology Sector Index Fund (NASDAQ:QTEC), an estimated $2.90 million transaction based on previously disclosed values.

What happened

According to a filing with the Securities and Exchange Commission dated January 15, Guided Capital Wealth Management sold its entire position of 12,639 shares in the First Trust NASDAQ-100 Technology Sector Index Fund (NASDAQ:QTEC). The estimated value of the trade was $2.90 million. The fund reported no remaining shares of QTEC at quarter’s end.

What else to know

Top holdings after the filing:

• NYSEMKT:USFR: $13.47 million (9.4% of AUM)
• NYSEMKT:QUAL: $9.94 million (7.0% of AUM)
• NYSEMKT:CGUS: $9.82 million (6.9% of AUM)
• NYSEMKT:DEED: $9.19 million (6.4% of AUM)
• NYSEMKT:PYLD: $8.81 million (6.2% of AUM)

As of January 14, shares of QTEC were priced at $236.31, up 25.0% over the past year and outperforming the S&P 500 by 6.41 percentage points

ETF overview

ETF snapshot

• Investment strategy: Seeks to track the performance of the NASDAQ-100 Technology Sector Index, investing at least 90% of assets in index constituents classified as technology.
• Portfolio composition: Holds an equal-weighted basket of common stocks and depositary receipts from the technology segment of the NASDAQ-100 Index.
• Expense ratio and structure: Structured as an open-ended ETF, designed for liquidity and transparency; expense ratio not provided in current data.

The First Trust NASDAQ-100-Technology Sector Index Fund (QTEC) provides investors with targeted exposure to the technology segment of the NASDAQ-100 through an equal-weighted approach. The fund's strategy emphasizes diversification across leading technology companies, reducing concentration risk compared to market-cap weighted alternatives. QTEC's structure and index-tracking methodology make it suitable for investors seeking broad-based, systematic access to the technology sector within a transparent ETF wrapper.

What this transaction means for investors

The decision to exit this technology-heavy ETF after a year of roughly 25% gains looks more like a sign of discipline than distress. Equal-weighted tech strategies like this one tend to shine during broad-based rallies, especially when semiconductors and software move in tandem. But that same structure can amplify volatility once leadership narrows or valuations stretch.

The sale also stands out when viewed alongside the firm’s remaining holdings. Capital appears very focused in cash-like and factor-based exposures, including short-duration instruments and quality-oriented equity funds, suggesting a deliberate effort to rebalance risk after a strong tech-driven run. That contrasts with the ETF’s own fundamentals, which remain solid. The fund holds 45 technology stocks, is heavily exposed to software and semiconductors, and is trading near its 52-week highs following sustained momentum.

For long-term investors, trimming after outperformance can be just as important as buying during drawdowns, and it doesn't mean this tech story is necessarily broken. Equal-weighted tech funds reward broad participation, but they require patience through cycles where mega-cap concentration dominates returns. Investors still bullish on long-term innovation may see pullbacks as opportunities, while acknowledging that rebalancing after strong gains is often a sign of process-driven portfolio management rather than a bearish call on the sector.

Jonathan Ponciano 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.