The Betashares Nasdaq 100 ETF (ASX: NDQ) has had a good month so far in November 2021, with the exchange-traded fund (ETF) rising by around 6%.
Why is Betashares Nasdaq 100 ETF having such a good month?
How an index ETF works
Lots of the most popular ETFs on the ASX simply track an index, a group, of shares.
If the underlying index of shares collectively goes up (or down), then the ETF should also follow the movement of the index. The biggest positions in an ETF's portfolio will have the largest impact on the return, whilst the smallest positions will have limited impact.
This ETF tracks the performance of the NASDAQ-100 Index (before fees and expenses). The NASDAQ-100 comprises 100 of the largest non-financial companies listed on the NASDAQ market.
NASDAQ-100 Index performance
Given the ASX ETF tracks what the NASDAQ-100 Index does, it could be useful to know what's happening in North America. Foreign exchange rates sometimes create a bit of difference between the underlying index and the ASX ETF.
The NASDAQ-100 Index has risen by more than 3% since the start of November 2021 in US dollar terms. The Australian dollar has weakened against the US dollar, boosting the returns for Aussies.
What shares are in the Betashares Nasdaq 100 ETF?
Many of the world's biggest and most recognised companies are in this portfolio. Those names include businesses like: Apple, Amazon.com, Tesla, Nvidia, Alphabet (Google), Facebook/Meta Platforms, Adobe, Netflix, PayPal, Costco, PepsiCo, Intel, Starbucks, Booking, Mondelez International (Cadbury, Oreo, Ritz, Toblerone etc), Moderna, Zoom Video Communications, eBay and Kraft Heinz.
Which shares have been driving the performance?
As already mentioned, the biggest businesses have the largest impact on ETFs. Which ones helped Betashares Nasdaq 100 ETF?
Apple shares have only risen by 1% this month so far.
The Amazon share price has gone up by more than 4%.
Tesla shares have risen almost 10%.
Nvidia shares have gone up by more than 16% since the start of the month.
The Alphabet share price has only gone up around 0.5%.
Facebook/Meta Platforms has seen its share price rise by more than 5% since the start of the month.
Plenty of businesses have been giving investors updates about their quarterly earnings.
Business updates can have impacts on share prices, particularly if the update (or outlook) was materially better, or worse, than the market was expecting.
For example, Apple recently reported its FY21 fourth quarter update, with record revenue of US$83.4 billion. This was an increase of 29% year on year. Its quarterly diluted earnings per share (EPS) was US$1.24. It also declared a cash dividend of US$0.22 per share. Indeed, the company said that in FY21, it set new revenue records in all of its geographic segments and product categories in spite of continued uncertainty in the economic environment.
Plenty of businesses in the Betashares Nasdaq 100 ETF are actually reporting high levels of revenue and earnings.
