Is NDQ expensive or cheap compared to other ASX ETFs?

The BetaShares NDQ ETF is a popular one on the ASX. But does it offer value?

| More on:
A man sitting at his dining table looks at his laptop and ponders the CSL balance sheet and the value of CSL shares today

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Key points

  • The BetaShares Nasdaq 100 ETF is a popular choice on the ASX
  • It is the only ETF on the ASX that exclusively covers NASDAQ shares
  • But is this ETF's management fee expensive?

The BetaShares Nasdaq 100 ETF (ASX: NDQ) is a unique exchange-traded fund (ETF) on the ASX. It is the only ASX-listed ETF that covers the NASDAQ-100 (INDEXNASDAQ: NDX) Index and NASDAQ shares exclusively.

The NASDAQ is one of the two major stock exchanges over in the United States. It tends to house the newer, tech-focused companies on it, which is why NDQ is often called a tech ETF.

Its largest holdings would be familiar to many ASX investors. They include Apple Inc (NASDAQ: AAPL), Amazon.com Inc (NASDAQ: AMZN), Microsoft Corporation (NASDAQ: MSFT), Tesla Inc (NASDAQ: TSLA) and Alphabet Inc (NASDAQ: GOOG)(NASDAQ: GOOGL).

All of these factors have made the NDQ ETF a popular one for ASX investors. The fund now has more than $2.2 billion in assets under management. Perhaps the performance history of this ETF has also helped. NDQ has proven to be one of the ASX’s best-performing ETFs in recent years.

Even though NDQ has taken a hit of more than 36% over 2022 year to date, this ETF has still managed an average performance of 19.94% per annum over the past three years, and 18.15% per annum over the past five.

But has this performance come cheap? What kind of fee does NDQ charge?

Is the NDQ ETF cheap or expensive?

So the BetaShares Nasdaq 100 ETF charges an annual management fee of 0.48% per annum. That’s $48 a year for every $10,000 invested.

That’s objectively on the high side of what many ASX ETFs charge their investors. For example, the most popular ETF on the ASX is the Vanguard Australian Shares Index ETF (ASX: VAS). VAS charges a management fee of 0.1% per annum, or $10 for every $10,000 invested.

Another popular ETF covering US shares is the iShares S&P 500 ETF (ASX: IVV). IVV only charges a fee of 0.04% per annum, or $4 for every $10,000 invested.

But even though these ETFs are cheaper than NDQ, investors would still have been better off in the NASDAQ ETF that VAS or IVV over the past few years.

That’s because VAS has returned an average of 8.95% per annum over the past five years. IVV has averaged 13.95% per annum. That’s not quite in the same ballpark as NDQ’s 18.15% per annum.

Even so, there’s no guarantee that the NASDAQ 100 will continue to beat out the ASX and the S&P 500 going forward. If these other ETFs outshine NDQ over the next five years, its management fee might start looking expensive.

But no doubt investors in the BetaShares Nasdaq 100 ETF would be happy with the returns they have enjoyed up to this point, even with the wobbliness we’ve seen over 2022 thus far.

Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Motley Fool contributor Sebastian Bowen has positions in Alphabet (A shares), Amazon, Apple, Microsoft, and Tesla. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has positions in and has recommended Alphabet (A shares), Alphabet (C shares), Amazon, Apple, BETANASDAQ ETF UNITS, Microsoft, and Tesla. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has recommended the following options: long March 2023 $120 calls on Apple and short March 2023 $130 calls on Apple. The Motley Fool Australia has positions in and has recommended BETANASDAQ ETF UNITS. The Motley Fool Australia has recommended Alphabet (A shares), Alphabet (C shares), Amazon, Apple, and iShares Trust - iShares Core S&P 500 ETF. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

More on ETFs

A man in his 30s holds his laptop and operates it with his other hand as he has a look of pleasant surprise on his face as though he is learning something new or finding hidden value in something on the screen.
ETFs

Experts say these top ETFs are buys right now

Here are two ETFs that experts think investors should be looking at...

Read more »

recreational fisherman holding fishing rod and hands apart indicating it was this big with smile on his face
ETFs

Here’s how much the Vanguard Australian Shares Index ETF (VAS) has paid in dividends over the past 5 years

How much dividend income does the VAS ETF throw off exactly?

Read more »

Man looking amazed holding $50 Australian notes, representing ASX dividends.
ETFs

2 excellent ASX ETFs to buy for dividends

These ETFs provide plenty of income for investors...

Read more »

ETF written on cubes sitting on piles of coins.
ETFs

Here’s why the iShares S&P 500 ETF (IVV) has climbed 7% in a month

It’s been a solid few weeks for US shares. What’s happening?

Read more »

A cute young girl wears a straw hat and has a backpack strapped on her back as she holds a globe in her hand with a cheeky smile on her face.
ETFs

2 reasons to consider buying the Vanguard International Shares ETF (VGS) right now

What's to like about this popular ETF from Vanguard?

Read more »

A man sits bolt upright watching something intently on his television.
ETFs

2 quality ETFs for ASX investors to buy in August

Here are two top ETFs to buy...

Read more »

The letters ETF sit in orange on top of a chart with a magnifying glass held over the top of it
ETFs

3 top ETFs for ASX investors to buy next week

These highly rated ETFs could be in the buy zone...

Read more »

ETF written in blue with a man and woman sitting on their laptops.
ETFs

2 exciting ETFs for ASX investors to buy today

Here are a couple of highly rated ETFs...

Read more »