I think that Betashares Nasdaq 100 ETF (ASX: NDQ) could be one of the best exchange-traded funds (ETFs) around.
What makes NDQ ETF so good
Betashares Nasdaq 100 ETF is one of the larger, and also one of the better-performing, ETFs around in recent years.
An ETF can only perform as well as the underlying businesses in that portfolio. The companies in Betashares Nasdaq 100 ETF are some of the best businesses in the world.
It’s invested in 100 of the biggest non-financial businesses on the NASDAQ. That means we’re talking about names such as Apple, Microsoft, Amazon.com, Alphabet, Facebook, Tesla, PayPal an Adobe. Most of these businesses are making big profits and have very strong economic positions. I can’t imagine what would knock these players off their game.
There are s0 many attractive businesses in this portfolio beyond just the mega giants I’ve already mentioned. Cisco Systems, Netflix, Broadcom, Costco, Qualcomm, Texas Instruments, Moderna, Intuit, Advanced Micro Devices, Applied Materials, Intuitive Surgical and so on.
There is a lot of exposure to tech shares with this portfolio. But in my opinion, that’s a positive because those tech names are the ones that are performing well, having strong & growing margins, and continue to come up with new products and services for consumers.
This quality is resulting in strong returns
Past performance is not a reliable indictor of future performance. But I think the returns are an obvious outcome from their strong competitive positions and continuing re-investing efforts.
Over the last five years to 31 July 2021, the Betashares Nasdaq 100 ETF had returned an average return per annum of 27.2% per annum. Those numbers are after the management costs 0.48% per annum.
Summary thoughts on NDQ ETF
If an investor’s portfolio is largely focused on the ASX, then this ETF could be a good way to get that diversification whilst sticking to some of the West’s biggest tech names which have very strong economic moats.
Whilst I don’t own this investment in my own portfolio, I do have indirect economic exposure to the FAANG (and similar other) names. It could be a mistake not to have a bit of exposure to them because of how strong they seem to be. However, likely rising interest rates could lead to more volatility.
