Should Fidelity Nasdaq Composite Index ETF (ONEQ) be on your investing radar?

The Fidelity Nasdaq Composite Index ETF (ONEQ) was launched on September 25, 2003, and is a passively managed exchange traded fund designed to offer broad exposure to the Large Cap Growth segment of the US equity market.

The fund is sponsored by Fidelity. It has amassed assets over $9.54 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

Large cap companies usually have a market capitalization above $10 billion. They tend to be stable companies with predictable cash flows and are usually less volatile than mid and small cap companies.

While growth stocks do boast higher than average sales and earnings growth rates, and they are expected to grow faster than the wider market, investors should note these kinds of stocks have higher valuations. Also, growth stocks are a type of equity that carries more risk compared to others. Even though growth stocks are more likely to outperform their value counterparts in strong bull markets, value stocks have a record of delivering better returns in almost all markets than growth stocks.

Costs

Expense ratios are an important factor in the return of an ETF and in the long term, cheaper funds can significantly outperform their more expensive counterparts, other things remaining 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 0.53%.

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 50.4% of the portfolio. Telecom and Consumer Discretionary round out the top three.

Looking at individual holdings, Nvidia Corp (NVDA) accounts for about 11.4% of total assets, followed by Apple Inc (AAPL) and Microsoft Corp (MSFT).

The top 10 holdings account for about 62.32% 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 added about 2.09% so far this year and it's up approximately 24.29% in the last one year (as of 01/13/2026). In the past 52-week period, it has traded between $60.22 and $94.14.

The ETF has a beta of 1.16 and standard deviation of 19.67% for the trailing three-year period, making it a medium risk choice in the space. With about 1031 holdings, it effectively diversifies company-specific risk.

Alternatives

Fidelity Nasdaq Composite Index ETF holds a Zacks ETF Rank of 1 (Strong Buy), which is based on expected asset class return, expense ratio, and momentum, among other factors. Because of this, ONEQ is an excellent option for investors seeking exposure to the Style Box - Large Cap Growth segment of the market. There are other additional ETFs in the space that investors could consider as well.

The Vanguard Growth ETF (VUG) and the Invesco QQQ (QQQ) track a similar index. While Vanguard Growth ETF has $205.62 billion in assets, Invesco QQQ has $413.12 billion. VUG has an expense ratio of 0.04% and QQQ charges 0.2%.

Bottom line

While an excellent vehicle for long term investors, passively managed ETFs are a popular choice among institutional and retail investors due to their low costs, transparency, flexibility, and tax efficiency.