NVIDIA Corporation (NASDAQ: NVDA) shares have delivered enormous returns over the past five years, rising by 2,298%, as we can see on the chart below.
Some compelling ASX-listed exchange-traded funds (ETFs) can give us exposure to the technology stock within their portfolios. ASX ETFs are useful because Nvidia is listed in the US, and Aussies can't buy Nvidia shares directly from the ASX.
Nvidia is an attractive business because it's one of the key companies enabling the rapid advancement of artificial intelligence (AI) around the world. It's also a major player in the graphics processing unit (GPU) space, which is used in applications like gaming.
Some options, like the iShares S&P 500 ETF (ASX: IVV) and Vanguard MSCI Index International Shares ETF (ASX: VGS), do own Nvidia shares, with an allocation linked to Nvidia's market capitalisation size. However, they also own hundreds of other shares, so the Nvidia weighting is fairly limited.
In this article, I'll discuss one particular ASX ETF that offers extensive exposure to Nvidia shares.
Global X Fang+ ETF (ASX: FANG) can give strong Nvidia share exposure
This fund only has 10 positions in the portfolio, with those companies being Tesla, Apple, Meta Platforms, Netflix, Amazon.com, Microsoft, Alphabet, Snowflake, Broadcom and Nvidia.
The purpose of the ETF is to invest in companies at the leading edge of next-generation technology, including household names and newcomers.
These companies are equally weighted and rebalanced quarterly, so, at every three-month interval, Nvidia will make up 10% of the portfolio. In the short term, the weightings change as share prices go up or down.
Other businesses also provide exposure to AI within the FANG ETF, including Microsoft (which owns a significant stake in OpenAI, the business behind ChatGPT) and Alphabet.
The FANG ETF gives investors access to several other growth themes, including global digitalisation, online video, e-commerce, cloud computing, and more.
Past performance is certainly not a guarantee of future returns, but over the past three years, it has returned an average of 16.7% per annum. That's roughly double the return of the S&P/ASX 200 Index (ASX: XJO).
We don't know what short-term returns will be, but if companies keep developing new or improved technological products and services and keep reinvesting in their businesses at high rates of return, then there's a very good chance they'll keep growing profit at a pleasing pace.
The businesses inside the FANG ETF are the types of stocks I'd want exposure to in my portfolio.
