3 reasons the BetaShares Nasdaq 100 ETF (NDQ) is a must-buy for long-term ASX investors

This has been a high-performing ETF. I still think it's a buy!

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I believe the BetaShares Nasdaq 100 ETF (ASX: NDQ) is a wonderful exchange-traded fund (ETF) worth a spot in almost every ASX investor's long-term portfolio. It has performed exceptionally well for investors and I think it could continue to deliver pleasing long-term returns.

The Nasdaq is one of the main American stock exchanges on which many of the USA's leading tech-related businesses are listed.

The NDQ ETF tracks the performance of the NASDAQ-100 (NASDAQ: NDX), which houses 100 companies that are among the largest and most profitable businesses in the US. Many of these are global leaders in their fields.  

Why is it such a good option for long-term investors? Let's look at three factors that make it so appealing in my view.  

Great businesses

I believe the best types of companies to invest in are those likely to deliver compounding, long-term returns generated by their ability to grow profits.

These global winners often own products and services that resonate broadly across different types of customers across the world. More consumers or more subscribers then translates into stronger revenue and higher profits.

For example, businesses like Microsoft, Alphabet, Amazon, Apple, Nvidia, and Meta Platforms, which are among the biggest holdings in the NDQ ETF, have been highly successful at growing their operations and profits at tremendous rates.

The BetaShares Nasdaq 100 ETF has approximately 41.4% of its overall weighting invested in the above six tech giants. It's a great way to get investment exposure to all these tech titans with a single ASX holding.

To me, it's no surprise the NDQ ETF has returned an average of 22.5% per annum in the last five years, given the earnings growth rates these companies are still achieving, despite many years of strong growth already in the bag.

Consider for a moment all the technological changes constantly unfolding across smartphones, online video, virtual and augmented reality, cloud computing, artificial intelligence (AI), online retail, gaming, and more. The big US tech companies are at the forefront of all these trends.

Now, I'm not expecting the next five years to be as good as the last five years for the BetaShares Nasdaq 100 ETF, but I am still optimistic it can outperform the S&P/ASX 200 Index (ASX: XJO) in the long term.

Reasonable fee

Many fund managers offering exposure to a portfolio of this quality could charge management fees of up to 1% per annum.

The NDQ ETF has an annual management fee of 0.48%, which I regard as pretty fair. Plus, the BetaShares Nasdaq 100 ETF doesn't charge outperformance fees.

Overall, the fee structure is appealing and helps deliver good net returns.

Diversification

Whilst it is tech-focused, investors shouldn't just think of the NDQ ETF as a tech fund since it also invests in a range of other companies from different sectors. These sectors include financials, energy, utilities, materials, industrials, healthcare, and consumer staples.

These investments across alternative sectors can help offset some of the risks when big tech experiences any downturns. Some non-tech companies held by the BetaShares Nasdaq 100 ETF include Costco, T-Mobile, PepsiCo, Linde, Intuitive Surgical, Booking, and Honeywell.

Overall, I think there's a lot for ASX investors to like about the NDQ ETF.

Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister to Meta Platforms CEO Mark Zuckerberg, is a member of The Motley Fool's board of directors. John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has positions in and has recommended Alphabet, Amazon, Apple, BetaShares Nasdaq 100 ETF, Booking Holdings, Costco Wholesale, Intuitive Surgical, Linde, Meta Platforms, Microsoft, and Nvidia. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has recommended T-Mobile US and has recommended the following options: long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft. The Motley Fool Australia has positions in and has recommended BetaShares Nasdaq 100 ETF. The Motley Fool Australia has recommended Alphabet, Amazon, Apple, Booking Holdings, Meta Platforms, Microsoft, Nvidia, and T-Mobile US. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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