It's not too often that you'll find any ASX investment, share or exchange-traded fund (ETF) that has returned an average of 19% per annum over a five-year period. Yet that's exactly what the lucky investors of one ASX ETF have enjoyed since 2018.
But you probably don't need to tell owners of the BetaShares NASDAQ 100 ETF (ASX: NDQ) that.
Yes, as of 31 July, NDQ investors have basked in an average annual performance of 19.52% per annum. Indeed, this US-based ASX ETF has given its investors an average rate of return of 19.06% per annum since its inception in May 2015.
For some context, a 19.52% return over five years is enough to turn a $10,000 investment into $26,331. If the BetaShares NASDAQ 100 ETF manages to keep this rate of return steady over the next five years (not guaranteed by any means, by the way), that $10,000 will be worth almost $70,000.
So how has this uber-successful ASX ETF pulled off this spectacular return?
How has this ASX ETF given investors an annual 19% return for five years?
Well, the BetaShares NASDAQ 100 ETF is an index fund that tracks the 100 largest shares on the US NASDAQ stock exchange. Over 'Stateside', there are two primary stock exchanges – the NASDAQ and the New York Stock Exchange (NYSE).
The NASDAQ tends to be known as the cooler, younger sibling of the NYSE and houses most of the most prominent US tech stocks.
A look at this ASX ETF's current top holdings pretty much explains this fund's epic run since 2018. Here are NDQ's top 10, as of 31 July, as well as their five-year share price performance:
|NDQ Holding||Current (as of 31 July) portfolio weighting (%)||5-year share price performance (at time of writing)|
|Apple Inc (NASDAQ: AAPL)||11%||227.15%|
|Microsoft Corp (NASDAQ: MSFT)||9.4%||200.18%|
|Alphabet Inc (NASDAQ: GOOG)(NASDAQ: GOOGL)||6%||113.34% (Class A stock)|
|Amazon.com Inc (NASDAQ: AMZN)||5.6%||47.23%|
|NVIDIA Corporation (NASDAQ: NVDA)||4.1%||592.5%|
|Meta Platforms Inc (NASDAQ: META)||3.7%||75.91%|
|Tesla Inc (NASDAQ: TSLA)||3%||1,104.4%|
|Broadcom Inc (NASDAQ: AVGO)||2.9%||302.78%|
|PepsiCo Inc (NASDAQ: PEP)||2.1%||59.84%|
|Costco Wholesale Corporation (NASDAQ: COST)||2.1%||148.8%|
As you can see, this ASX ETF is stacked with eye-watering winners. We have Apple's 227.15% gain, Nvidia's 92.5% rise, and Tesla's jaw-dropping 1,104.4% rocketship here.
So considering how much these American stock market giants have soared since 2018, it's not hard to see why this ASX ETF that holds these shares has done so well. No doubt, investors will be hoping the next five years will prove just as lucrative. But we'll have to wait and see what happens.