With so many excellent exchange-traded funds (ETFs) available on the ASX, choosing the best one isn't always straightforward.
Some investors want exposure to the world's fastest-growing companies, while others prefer something that provides a more balanced investment.
And then there are those who want to benefit from the enormous changes taking place in technology.
So, where does the popular NDQ ETF fit in? And could it be the best investment of the lot?
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Why I rate the NDQ ETF so highly
The Betashares Nasdaq 100 ETF (ASX: NDQ) is one of my favourite ways to invest in the long-term growth of technology.
It tracks the Nasdaq-100 Index, providing investors with exposure to 100 of the largest non-financial companies listed on Nasdaq.
And some of those businesses are at the centre of the artificial intelligence (AI) revolution.
Take NVIDIA, for example. Its powerful chips have become essential for developing and running advanced AI systems, with demand coming from some of the world's largest technology companies.
Then there's Microsoft, which is investing heavily in AI while expanding its enormous cloud computing business.
These are two different businesses, but both have opportunities to benefit as AI becomes more widely adopted.
And they're far from alone. The NDQ ETF also owns companies developing advanced semiconductors, operating enormous digital platforms, and building the infrastructure needed to support new technologies.
I think that's an exciting collection of businesses to own.
Why the next decade could be rewarding
What I like about the NDQ ETF is that it gives investors exposure to companies shaping how the world operates.
Artificial intelligence is an obvious opportunity, but I think there's much more to the story.
Cloud computing, automation, digital advertising, ecommerce, and advances in semiconductor technology could all support earnings growth over the coming decade.
And many of the ETF's largest holdings already generate substantial profits, allowing them to keep investing in new opportunities.
Of course, that doesn't guarantee strong share price returns. Investors have high expectations for these businesses, and disappointing earnings or weaker enthusiasm for AI could cause significant volatility.
But I'm optimistic that technology will continue creating enormous wealth over time. And I think the NDQ ETF is exceptionally well-positioned to participate in that growth.
Is it the best ETF for everyone?
This is where I think the answer depends on what you're trying to achieve. The NDQ ETF has a significant concentration in technology and related sectors, with its largest holdings accounting for a substantial portion of the portfolio.
That's something I'd happily accept if my goal were to gain meaningful exposure to AI and technology.
But someone wanting a more balanced investment might prefer the Vanguard MSCI Index International Shares ETF (ASX: VGS).
It spreads investments across a much wider range of companies and industries in developed markets.
Alternatively, the Vanguard Diversified High Growth Index ETF (ASX: VDHG) offers a mixture of Australian and international shares, alongside a smaller allocation to bonds.
Both provide exposure to successful technology businesses while spreading investments more widely.
Foolish takeaway
I think the NDQ ETF deserves to be considered one of the best ETFs available to Australian investors.
If I wanted to invest in the AI revolution and the continued expansion of the world's leading technology companies, it would be near the top of my shopping list.
For someone seeking a more balanced investment, I'd probably look elsewhere. But for long-term technology exposure, I think the NDQ ETF is very difficult to beat.
