The BetaShares Nasdaq 100 ETF (ASX: NDQ) has had a shocking year in 2022, as has the index it mirrors.
The exchange traded fund (ETF) has dumped 26% year to date while the NASDAQ-100 Index (NASDAQ: NDX) has tumbled 29%.
But such poor performance didn't appear to deter the market's youngest investors.
New data from share trading and superannuation platform Superhero shows the BetaShares Nasdaq 100 ETF has been the most traded ASX share among both Gen Z and Millennial investors using the platform in 2022.
Gen Zs went one step further, however. The market's youngest investors doubled down on ETFs in general.
So, what drove younger investors to flock to the BetaShares Nasdaq 100 ETF and its fellow ETFs this year? Let's take a look.
Gen Z doubles down on BetaShares Nasdaq 100 ETF
Market volatility didn't turn Superhero users away from investing on the ASX in 2022. In fact, confidence in ETFs appeared to rise amid a rollercoaster year on the bourse.
The platform reveals 83% of ETF trades it received this year were buys. That's compared to around 70% of all trades. Superhero co-founder and CEO John Winters commented on the phenomenon:
Given the volatility in the market this year, it's unsurprising to see our investors, particularly younger investors, look to ETFs as a way to build their portfolios.
Half of all Superhero users aged between 18 and 32 traded in ETFs in 2022.
Of course, BetaShares Nasdaq 100 ETF was Gen Z's favourite stock, according to the platform.
The youngest group of investors were also found to flock to the Vanguard Australian Shares Index ETF (ASX: VAS) and the Vanguard Diversified Balanced Index ETF (ASX: VDBA) – the funds came in as the second and third most popular trades among those aged 18 to 25. Winters continued:
Overall, we've seen more buy trades over sell trades and for ETFs, four in five trades made by Gen Zs and Millennials were buys, indicating a long-term strategy to consistently build their portfolios.
Are ETFs like NDQ the future of ASX investing?
So, are ETFs like the Betashares Nasdaq 100 ETF the future of Aussie investing? Their popularity has certainly increased this year.
New research by fund manager BetaShares has revealed 1.9 million Australians are now invested in ETFs – a 6% year-on-year increase.
The industry leader expects that figure to rise by around 230,000 in 2023 following this year's trend away from unlisted managed funds.
BetaShares CEO Alex Vynokur commented on the findings:
The key benefits of ETFs – namely convenience, liquidity, transparency, and cost-effectiveness – continue to resonate as more investors allocate greater amounts of their portfolios to ETFs than ever before.
Remarkably, 32% of Australians invested in ETFs use the investment vehicles as the core of their portfolio. That's up from 4% in 2019, according to the fund manager. Vynokur continued:
This research is backed by our own experience where we have seen continued interest in core-oriented market exposures like our BetaShares Australia 200 ETF (ASX: A200) and Nasdaq-100 ETF.
