The Betashares Nasdaq 100 ETF (ASX: NDQ) has been an incredibly strong-performing exchange-traded fund (ETF) for a long time.
In the last five years to 31 July 2024, the NDQ ETF has returned an average of 21.4%. This is significantly better than the ASX and global share markets. We can see the strong capital growth on the chart below.
We shouldn't view past performance as a reliable indicator of future performance, but I think it shows how strong the NASDAQ 100 group of companies has been over the last several years.
However, with the NDQ ETF unit price down 6% since 1 August 2024, I believe this could be the right time to invest in this leading fund.
Powerful businesses
The Betashares Nasdaq 100 ETF is not just a tech ETF. It's invested in various leading businesses in different sectors that have very strong market positions, good margins and enviable balance sheets.
The NDQ ETF has large allocations in names like Apple, Microsoft, Nvidia, Alphabet, Meta Platforms, Broadcom and Amazon.
The portfolio also owns various other compelling businesses, such as Costco, Netflix, Adobe, Advanced Micro Devices, Linde, Intuitive Surgical, Applied Materials, and Honeywell.
Strong tailwinds
The world becoming increasingly technological is a powerful tailwind for all the businesses involved over the past two decades.
When another new product or service rapidly expands across society, it tends to be one of the tech businesses that are integral to that growth.
Artificial intelligence (AI) expansion is helping Nvidia and Microsoft. The increased global usage of smartphones is helping Apple, Alphabet and Meta Platforms. Growth of online video has helped Netflix and Alphabet's YouTube.
What will cause the next growth explosion for the NDQ ETF? I don't think AI has finished its growth cycle, so it may deliver plenty of growth in the years ahead. Virtual reality could be another growth story in the coming years, which may help Meta Platforms, among others.
Long-term global growth
Many companies in the NDQ ETF are already some of the most global-oriented businesses you could find. But, I think these businesses will be able to keep growing their presence and operations worldwide for a long time.
Businesses like Microsoft have done an excellent job of growing earnings per share (EPS) over the long term, which is helping increase their underlying value.
I think the NDQ ETF can continue to deliver good returns if the underlying earnings of companies continue rising, and I think there's a good chance they will. That's why I'd be happy to buy units of the Betashares Nasdaq 100 ETF today for the long term.
