Jacqueline CaldwellThe Betashares Nasdaq 100 ETF (ASX: NDQ) is your gateway to the powerhouse of the US NASDAQ stock exchange. This fund is designed to mirror the performance of the NASDAQ-100 Index (NASDAQ: NDX), which incorporates the 100 most significant companies on the NASDAQ by market capitalization. Contrary to popular belief, the NASDAQ 100 comprises a diverse sector mix, with only roughly half representing tech giants. The remainder spans across communication services, consumer discretionary, consumer staples, health care, and more.
Over the past year, this ETF has gained an impressive 30.19%, closing at $47.68 per unit on Thursday, despite a slight daily drop of 0.68%. But which stocks are driving this outstanding growth?
Leading the charge is chip innovator Nvidia Corp, surging by a mind-boggling 180.6%, positioning itself as the top performer within the Betashares Nasdaq 100 ETF. Arm Holdings follows closely with a significant spike of 118.6% in its value. Constellation Energy and Netflix also marked substantial gains at 102.6% and 83.1% respectively, contributing to the ETF’s robust returns.
Other notable contributors include cybersecurity firm Fortinet, with a 75% leap, and biotech pioneer Intuitive Surgical, scaling up by 71%. Meta Platforms and Broadcom added to the momentum, climbing by 70.1% and 68%, respectively.
Rounding out the list are Booking Holdings, Crowdstrike, Costco, and Marvell Technology, each showing substantial double-digit growth.
In the past five years, the Betashares Nasdaq 100 ETF has soared 125.4%, vastly outperforming the 23.7% increase of the S&P/ASX 200 Index (ASX: XJO).
Tips and Tricks for Investing in the Betashares Nasdaq 100 ETF
Investing in the Betashares Nasdaq 100 ETF offers exposure to some of the most significant and dynamic companies in the world. Here are some tips, life hacks, and interesting facts to help you make the most out of your investment.
1. Diversify Your Portfolio:
While the Nasdaq 100 ETF predominantly houses tech giants, it covers various sectors like communication services, consumer goods, and healthcare. Diversifying your portfolio with this ETF means you’re not overly reliant on a single industry, which can reduce risks and provide more balanced returns over time.
2. Understand the Power of Compounding:
Investing in an ETF allows you to take advantage of compounding returns. Reinvest any dividends to grow your wealth exponentially. It’s often said that time in the market beats timing the market, so consider a long-term investment approach.
3. Stay Informed:
Be mindful of global economic changes and tech industry trends, as these can significantly impact the stocks within the Nasdaq 100. Keeping informed will allow you to make educated decisions about increasing or decreasing your holdings. Tools like financial news websites or apps can help you stay up-to-date.
4. Use Dollar-Cost Averaging:
Consider using a strategy like dollar-cost averaging, where you invest a fixed amount at regular intervals, regardless of the ETF’s price. This approach minimizes the impact of market volatility and averages out your purchase price over time.
5. Tax Efficiency:
ETFs are praised for their tax efficiency, primarily due to their unique structure that allows for in-kind transactions. It’s worth understanding how this might benefit your tax situation compared to other types of funds. Consult with a tax advisor to better understand your specific scenario.
Interesting Fact:
Did you know that the Nasdaq 100 Index often serves as a barometer for the broader tech sector’s performance? Although not solely composed of tech stocks, the index’s performance highlights trends and shifts within this pivotal sector.
Suggested Resources:
For more insights and updates on investment strategies and financial news, visit CNBC or Bloomberg. These platforms provide comprehensive finance coverage to stay informed on market trends that could influence your investments.
In conclusion, investing in the Betashares Nasdaq 100 ETF could be a rewarding venture, offering substantial growth potential through exposure to some of the most innovative companies. Equip yourself with these tips, be patient, and embrace the exciting journey of ETF investing.
