The Betashares Nasdaq 100 ETF (ASX: NDQ) has a number of compelling reasons to consider it as a long-term investment.
It’s one of the larger exchange-traded funds (ETFs) with net assets almost $2.1 billion.
This investment is provided by BetaShares, one of the biggest providers of ETFs in Australia.
But size is not one of the key factors why it could be worth considering Betashares Nasdaq 100 ETF.
Here are three to think about:
The S&P/ASX 200 Index (ASX: XJO) is dominated by two industries: financials and resources. Within that, there are a few sizeable businesses including Commonwealth Bank of Australia (ASX: CBA), Westpac Banking Corp (ASX: WBC), BHP Group Ltd (ASX: BHP) and Rio Tinto Limited (ASX: RIO).
But the Betashares Nasdaq 100 ETF is very different. It has 100 non-financial businesses in its portfolio. Resources don’t feature in the portfolio either. Almost half of the portfolio is classified as ‘information technology’ with another 19.7% in ‘communication services’ and 17.3% in ‘consumer discretionary’.
But those classifications may not be exactly what you’re thinking. Amazon and Tesla count as consumer discretionary businesses, whilst Alphabet (Google) and Facebook count as communication services businesses.
Not only can an investor get exposure to 100 businesses outside of the ASX, but those underlying earnings are being generated from right across the world. Think how many countries there are where people can use Google Search. Facebook is also in most countries in the world. And so on.
But this ETF isn’t just about diversification for the sake of being different.
Many of the businesses in the Betashares Nasdaq 100 ETF portfolio are among the best, if not the best, at what they do.
Apple is one of the global leaders in smartphones, computers and the extra services it offers. Microsoft is very strong in numerous categories like office software, cloud computing and gaming. Amazon has online retail, cloud computing and so on.
However, there are quite a few great companies in there, not just the ‘FAANG’ shares.
PayPal is a huge player in the payments and online retail space. Adobe has a number of important offerings.
Broadcom, Qualcomm, Texas Instruments, Intuit, Moderna, Applied Materials, Advanced Micro Devices, Intuitive Surgical, Zoom and so on.
There are so many quality names in the portfolio that are generating strong profit, growth and creating very powerful economic moats.
Betashares Nasdaq 100 ETF’s strong returns with a reasonable fee
Betashares Nasdaq 100 ETF has an annual management fee of 0.48%.
The portfolio of quality names has produced sizeable returns over the shorter-term and longer-term.
However, it’s important to note that past performance is not an indicator of future performance.
Over the last 12 months the ETF has seen a net return of 31.6%. Since inception in May 2015, Betashares Nasdaq 100 ETF has delivered an average return per annum of 22.5%.
However, investors will have to wait and see what the next few years of returns looks like.