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.
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.