Can the BetaShares Nasdaq 100 ETF (NDQ) give ASX investors another 32% in FY25?

It was a stellar year for this ETF in FY24. But what about FY25?

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By all accounts, the 2024 financial year that has just passed us by was a very successful one for ASX shares on the whole. Between the start of July 2023 and the end of June 2024, the S&P/ASX 200 Index (ASX: XJO) rose by a healthy 7.8%. If you include dividend returns, that gain stretches to around 12%.

But let's talk about how the BetaShares Nasdaq 100 ETF (ASX: NDQ) went.

The ASX 200 might have had a very strong year indeed over FY24. But the Betashares Nasdaq 100 exchange-traded fund (ETF) made it look silly, if we're to be frank.

NDQ units started FY24 priced at $35.05 each. But by the end of last month, those units finished up the financial year at $45.51. That's a gain worth 29.84%. If we include the value of the dividend distributions the ASX's NDQ investors enjoyed over the 12 months to 30 June, that return stretches to roughly 32.1%.

Not a bad effort for just one year of waiting. That kind of return is astonishingly good. There aren't too many investors that could have replicated it in their own portfolios, that's for sure.

As the Betashares Nasdaq 100 ETF is mostly made up of the United States' most prominent tech stocks, it's not too difficult to see where these huge returns come from. To illustrate, the five largest positions in the NDQ portfolio are (in order) Microsoft, Apple, NVIDIA, Alphabet and Broadcom.

  • Microsoft shares rose 31.25% over FY24.
  • Apple shares were up 8.58%.
  • Nvidia stock shot up a whopping 192%.
  • Alphabet's Class A shares enjoyed a 52.17% bounce over the year.
  • And Broadcom shares rocketed 85%.

Together, these five stocks account for 35.1% of NDQ's entire portfolio by weighting. So, with gains rolling out from these top five, NDQ units were always going to have a veritable party over FY24.

But what about FY25?

Can the NDQ ETF bring home another 32% for ASX investors in FY25?

Well, that's the million-dollar question. Normally, it would be prudent to state that a 30% gain from any investment, but particularly an index fund, is more likely to be one-off than a guide to future returns. As we stated earlier, a 30% gain is a rare feat in any stock market.

Additionally, it's also worth stating that past returns are never a guarantee of future prosperity with any investment.

Saying that though, the BetaShares Nasdaq 100 ETF does have a long track record of delivering massive returns. As of 28 June, NDQ units have returned an average of 22.24% per annum over the past five years and 20.04% per annum since the ETF's ASX inception in 2015.

This ETF's holdings are indisputably some of the best and most exciting companies in the world. So, I wouldn't be surprised if investors continued to enjoy meaningful gains from NDQ units.

However, that doesn't make buying this ETF today a sure thing. Like FY24 before it, the Betashares Nasdaq 100 ETF's FY25 will be made or broken by the performance of its top holdings.

If the US economy remains strong, global geopolitical tensions don't rise any further, and the presidential election in November goes relatively smoothly, then there's a decent chance that NDQ's top holdings (and thus the ETF itself) will have another successful year this financial year.

But that is a lot of ifs. If one or more of these factors turns sour, the Betashares Nasdaq 100 ETF could well take a major haircut in FY25.

Who knows how the NDQ ETF will fare on the ASX in FY25? Whatever happens, it will be well worth watching.

Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. Motley Fool contributor Sebastian Bowen has positions in Alphabet, Apple, and Microsoft. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has positions in and has recommended Alphabet, Apple, BetaShares Nasdaq 100 ETF, Microsoft, and Nvidia. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has recommended Broadcom and has recommended the following options: long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft. The Motley Fool Australia has positions in and has recommended BetaShares Nasdaq 100 ETF. The Motley Fool Australia has recommended Alphabet, Apple, Microsoft, and Nvidia. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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