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Direxion, an exchange traded fund provider known for its leveraged and inverse investment strategies, launched an equal-weight Nasdaq-100 ETF Wednesday.

Direxion NASDAQ-100 Equal Weighted Index Shares (NYSEARCA:QQQE) has an expense ratio of 0.35%. [Technology ETF Spotlight: Nasdaq-100]

The fund will rebalance quarterly to achieve its equal-weight objective, which may result in high portfolio turnover and higher transaction costs. [Nasdaq-100 ETF Rises on Apple Dividend]

Most traditional equity indices weight stocks by market capitalization. For instance, Apple (NASDAQ:AAPL) comprises around 20% of some tech sector ETFs. [Technology ETFs with Big Positions in Apple]

In contrast, an equal-weight methodology allows small- and mid-cap components to have a bigger say in the overall performance of a the fund. However, the heavier weighting in smaller companies may also contribute to greater volatility.

"This fund is designed to provide investors with balanced exposure and reduce concentration risk without overweighting potentially overvalued companies and underweighting undervalued companies," Daniel D. O'Neill, President and Chief Investment Officer of Direxion, said in a press release. "Investors are increasingly embracing an equal weighting approach to complement other U.S. large cap equity strategies that tend to be more highly concentrated in a select number of industries."

The new Direxion fund will be competing with the First Trust Nasdaq 100 Equal Weighted Index Fund (NASDAQ:QQEW). QQEW has an expense ratio of 0.60%.

Max Chen contributed to this article.

Disclosure: Tom's clients own AAPL.

Source: Direxion's New Equal-Weight Nasdaq 100 ETF Launches