I think that Betashares Nasdaq 100 ETF (ASX: NDQ) is one of the best exchange-traded funds (ETFs) for Aussie investors to consider among a few others.
I’m not just saying that because it has already produced great returns. Past returns are not a guarantee of future success.
But several factors make me think it can continue to be a strong performer:
Fair management fees
NDQ ETF is not the cheapest ETF out there, but I think the annual fee of 0.48% is very reasonable for the quality of the businesses in the portfolio.
Compare that fee to most other fund managers, they’ll typically charge 1% of net assets, or even more.
I think the fee is fair for the quality diversification that investors get.
Quality diversification
There are 100 businesses in the portfolio, listed on the NASDAQ. This is one of the stock exchanges in North America.
I think that 100 holdings is plenty of diversification. There are other ETFs that own 500 shares or even thousands, but I’m not sure how much more valuable benefit that extra adds.
The businesses in the NDQ ETF portfolio are among the best in the world at what they do.
Apple, Alphabet (Google), Microsoft, Amazon, PayPal, Adobe, Costco and Moderna are all names in the portfolio. Think how much it would take for a brand new business to beat one of these businesses at what they do. I’m not sure spending $1 billion would get close to any of them.
The great thing about the NASDAQ is that it’s not a group of tech names that are priced very expensively with little profit between them. Some of the businesses in this portfolio are some of the most profitable in the world and keep growing earnings over the long-term.
International diversification
Many Aussies are probably heavily weighted to ASX shares.
Being able to diversify away from the ASX, which isn’t tech focused, to this ETF which is very tech focused is a handy option. Australia only accounts for around 2% of the global share market capitalisation.
The NDQ ETF is one of the most popular ETFs. I think it’s a really useful investment.
