Here's why investors should like BetaShares NASDAQ 100 ETF (ASX:NDQ)

There are a number of positive reasons why investors should like the exchange traded fund BetaShares NASDAQ 100 ETF (ASX:NDQ).

| More on:

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

BetaShares NASDAQ 100 ETF (ASX: NDQ) is an exchange-traded fund (ETF). There are quite a few reasons why this investment could be worth considering.

What is BetaShares?

BetaShares describes itself as a leading manager of ETFs and other funds traded on the ASX. It was founded in 2019 – its aim is to provide intelligent investment solutions to help Australian investors meet their financial objectives.

At the end of February 2021, BetaShares had over $16 billion of assets under management.

About BetaShares NASDAQ 100 ETF

You might be able to guess that BetaShares NASDAQ 100 ETF owns 100 businesses within its portfolio. It has 100 of the biggest non-financial companies that are listed on the NASDAQ. BetaShares says that the portfolio includes many companies that are at the forefront of the 'new economy'.

Here some of the main reasons why investors could be interested in BetaShares NASDAQ 100 ETF:

1: Strong returns

One of the most important, perhaps the most important, reason to like an investment is the returns that it generates.

As at 26 February 2021, all of BetaShares NASDAQ 100 ETF's longer-term net returns have been above 20% on an annualised basis.

The prior 12 months showed a net return of 27.3%. The average net return per annum over the previous three years had been 24.2% per annum, over the last five years the net return was 23.7% per annum and since inception the net return per annum had been 20.7% per annum.

Whilst this isn't the strongest return out of all ETF's, it has been much stronger than the ASX 200.

2: Management fee

This ETF has an annual management fee of 0.48% per annum. Whilst this isn't as cheap as some ETFs like iShares S&P 500 ETF (ASX: IVV), it is much cheaper than an active fund manager that might typically charge an annual management fee of 1% per annum.

The lower the management fee, the more of the net return that stays in the hands of the investor.

3: Holdings

BetaShares NASDAQ 100 ETF has a high quality portfolio of shares, which are among the strongest businesses in their industries across the world.

At 8 March 2021, its largest holdings were: Apple, Microsoft, Amazon, Alphabet, Tesla, Facebook, NVIDIA, PayPal and Comcast.

4: Focus on technology

There is a tendency for US technology businesses to choose to list on the NASDAQ, which means that the ETF is weighted towards technology.

At the end of January 2021, almost half of the portfolio was classified as information technology businesses, with another 19.2% being consumer discretionary and 18.3% being communication services.

However, most people would think of Amazon and Tesla as technology businesses – but they are classified as consumer discretionary. Alphabet, Facebook and Netflix are classified as communication services.

5: Global earnings

Whilst all of BetaShares NASDAQ 100 ETF's holdings are listed in the US, there is definitely global earnings from the portfolio. Businesses like Microsoft effectively serve customers in almost every country in the world. Facebook's offerings are available in most places around the world.

There are also businesses that are headquartered overseas, but are listed on the NASDAQ. Some of the businesses that are examples of that include Baidu, JD.com, MercadoLibre, ASML and Atlassian.

Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. owns shares of BETANASDAQ ETF UNITS. The Motley Fool Australia has recommended BETANASDAQ ETF UNITS. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

More on ETFs

Man pointing an upward line on a bar graph symbolising a rising share price.
ETFs

3 ASX ETFs for growth investors in FY 2026

Let's see what makes these funds top picks for growth investors.

Read more »

A couple sit in front of a laptop reading ASX shares news articles and learning about ASX 200 bargain buys
Share Market News

Are blue-chip stocks or ASX ETFs a better investment?

Lets compare these two investment options based on long term returns. 

Read more »

Beautiful young couple enjoying in shopping, symbolising passive income.
ETFs

The best ASX ETFs to buy and hold for 20 years

It could pay to hold onto these funds for the long term. Let's find out why.

Read more »

a man leans back in his chair with his arms supporting his head as he smiles a satisfied smile while sitting at his desk with his laptop computer open in front of him.
ETFs

3 ASX ETFs for beginners (and experts) to buy and forget

Let's see why these funds could be great additions to a portfolio.

Read more »

A man sees some good news on his phone and gives a little cheer.
ETFs

Why these fantastic ASX ETFs could be buys with $2,500

Let's dig deeper into these funds and see what they offer investors.

Read more »

Woman in a hammock relaxing, symbolising passive income.
ETFs

This ASX ETF might just be the only investment you'll ever need

It doesn't get more hands-off than this ETF.

Read more »

A man looks at a graph on his phone.
ETFs

How are these new ASX ETFs performing since inception?

These two new funds have had opposite results since first listing.

Read more »

A graphic illustration with the words NASDAQ atop a US city and currency
ETFs

Everything you need to know about the NDQ ETF

This ETF is very popular with Aussie investors. Let's find out why.

Read more »