The Betashares Nasdaq 100 ETF (ASX: NDQ) was one of the stronger-performing exchange-traded funds (ETFs) on the ASX last year thanks to its exposure to the US tech giants.
The 2024 calendar year was a good one for the S&P/ASX 200 Index (ASX: XJO) with a 7.5% rise, but the global share market, and US shares in particular, performed even better.
Names like Microsoft, Apple, Alphabet, Amazon, Meta Platforms, Nvidia, and Tesla all delivered double-digit percentage returns, and they are among the biggest holdings in the NDQ ETF. Impressively Nvidia shares gained more than 170% last year.
It's important to remember that an ETF's returns are heavily reliant on the performance of its underlying holdings. Investors benefit from a) the capital growth and b) the dividends of these holdings, which the ETF then passes through to shareholders.
Let's take a closer look at how the Betashares Nasdaq 100 ETF performed across these two elements.
Image source: Getty Images
Capital growth
As we can see on the chart below, the NDQ ETF went on an impressive run during 2024.
The ETF unit price saw growth during the year with a 20% gain in the first ten months. The result of the US election in November then seemingly injected even more optimism into US markets, with investors hopeful the new Republican administration would be more business-friendly than the Democrats, and possibly implement corporate tax cuts.
In the last two months of the year, the NDQ ETF unit price increased by another 10.6%.
Over the whole of 2024, the Betashares Nasdaq 100 ETF unit price grew by a very strong 35%.
NDQ ETF distribution
Owners of this ETF who held units on 31 December 2023 would have received two distributions during the 2024 calendar year.
Investors received one distribution of 2.95 cents per unit in January 2024 and one of 91.7 cents per unit in July 2024, totalling approximately 94.6 cents.
This distribution equates to a distribution yield of approximately 2.5%. It consists of dividends received by the NDQ ETF and any capital gains it realised through sales of individual shareholdings.
Including both unit price gains and distributions, unitholders saw a total return of approximately 37.5% over the year.
With a return that strong, I'll note that past performance is not a reliable indicator of future performance, particularly for a short time period like the next 12 months. It'll be interesting to see what happens this year, particularly after the new US Government's inauguration later this month.
