The Nasdaq-100 (INDEXNASDAQ: NDX) is an index that many ASX investors would be familiar with. The Nasdaq houses some of the largest (and arguably, best) tech companies on the planet. The likes of Facebook Inc (NASDAQ: FB), Apple Inc (NASDAQ: AAPL), Microsoft Corporation (NASDAQ: MSFT), Tesla Inc (NASDAQ: TSLA), and Alphabet Inc (NASDAQ: GOOG)(NASDAQ: GOOGL) all call the Nasdaq home. Oh, as does Amazon.com Inc (NASDAQ: AMZN).
The only problem for ASX investors is that the Nasdaq, as you might have gathered by now, is an American exchange. As such, its companies are not available on the ASX. Well, not directly.
The BetaShares Nasdaq 100 ETF (ASX: NDQ) is available on the ASX however. This exchange-traded fund (ETF) is designed to mirror the Nasdaq 100 Index in Australian dollar terms. It contains all 100 of the top companies on the Nasdaq 100, including all of the tech giants mentioned above. Some other notable names that this ETF holds are PepsiCo, Inc (NASDAQ: PEP), NVIDIA Corporation (NASDAQ: NVDA), Netflix Inc (NASDAQ: NFLX), and PayPal Holdings Inc (NASDAQ: PYPL).
This ETF has been a top performer for its investors too. Since its inception in 2015, NDQ has returned an average of 21.01% per annum. Over the past 5 years, that expands to an average of 24.67% per annum. 3 years? 26.53%. And over the past year, we’re looking at a return of 34.9%.
Not bad, one could objectively say.
Tech pullback a buying opportunity for NDQ?
So why is this tech ETF looking enticing today? Well, it’s enjoying something of a rare pullback. NDQ units have lost around 3.8% since mid-April. As you might have gathered from the statistics above, this index does not seem to do pullbacks often. At least in recent years. This most recent pullback seems to be as a result of concern over future inflation — and the rising interest rates that tend to come with it.
The ASX is a top share market. But it doesn’t do well, market capitalisation wise, in the technology space, at least compared to the US markets. That’s where this ETF could prove useful for an ASX investor looking for more exposure: almost half of NDQ’s holdings are in the information technology sector.
NDQ charges a management fee of 0.48% per annum.