In this article, we will introduce you to four of the best NASDAQ ETFs. These ETFs are designed to replicate the performance of the NASDAQ or a subset of it, with different levels of exposure, risk, and return. We will also provide some information on their current share price and past returns, as well as some tips on how to choose the right ETF for your portfolio. Let’s get started!

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The NASDAQ is one of the most popular and influential stock market indexes in the world. It tracks the performance of over 3,000 companies, mostly in the technology, communication, and consumer sectors. The NASDAQ has been a leader in innovation and growth, delivering impressive returns for investors over the years.

But how can you invest in the NASDAQ without buying individual stocks? One of the easiest and most cost-effective ways is to use exchange-traded funds (ETFs). ETFs are funds that hold a basket of securities that track an index, sector, or theme. They trade like stocks on an exchange, but offer diversification, liquidity, and low fees.

What are the benefits of investing in the NASDAQ?

The NASDAQ is home to some of the most innovative and successful companies in the world, such as Microsoft, Apple, Amazon, Tesla, and Google. These companies have been driving the digital transformation of the economy, creating new products, services, and markets. They have also been resilient and adaptable to the challenges posed by the COVID-19 pandemic, benefiting from the increased demand for online shopping, cloud computing, streaming, and gaming.

Investing in the NASDAQ can offer several benefits, such as:

• Growth potential: The NASDAQ has outperformed the S&P 500 and the Dow Jones Industrial Average in the past decade, delivering an annualized return of 22.33%, compared to 16.90% and 14.88%, respectively. The NASDAQ also has a higher earnings growth rate than the other indexes, as its companies are expected to grow their profits by 19.8% in 2024, compared to 15.8% for the S&P 500 and 13.9% for the Dow Jones.
• Diversification: The NASDAQ offers exposure to a wide range of sectors and industries, such as technology, communication, consumer, health care, industrials, and utilities. While the NASDAQ is heavily weighted towards the technology sector, which accounts for about 50% of its market capitalization, it also includes companies from other sectors that can provide stability and balance to your portfolio.
• Low cost: Investing in the NASDAQ through ETFs can be a cheaper and more convenient option than buying individual stocks. ETFs typically have lower fees than mutual funds, and they allow you to buy and sell shares throughout the day, unlike mutual funds that trade only once a day. ETFs also offer tax advantages, as they generate fewer capital gains distributions than mutual funds.

What are the risks of investing in the NASDAQ?

While the NASDAQ can offer attractive returns, it also comes with some risks, such as:

• Volatility: The NASDAQ can be more volatile than the other major indexes, as its companies tend to have higher valuations, lower dividends, and higher growth expectations. This means that the NASDAQ can be more sensitive to changes in market sentiment, interest rates, inflation, and earnings. For example, in 2020, the NASDAQ had a maximum drawdown of 32.6%, compared to 30.7% for the S&P 500 and 36.4% for the Dow Jones.
• Currency risk: If you are investing in the NASDAQ from outside the US, you will be exposed to currency risk, as the NASDAQ is denominated in US dollars. This means that the value of your investment will depend not only on the performance of the NASDAQ, but also on the exchange rate between your local currency and the US dollar. If the US dollar appreciates against your local currency, your investment will be worth more in your local currency, and vice versa.
• Concentration risk: The NASDAQ can be more concentrated than the other indexes, as its top 10 holdings account for about 50% of its market capitalization. This means that the performance of the NASDAQ can be heavily influenced by the performance of a few large companies, such as Microsoft, Apple, Amazon, and Google. If these companies underperform or face regulatory or competitive challenges, the NASDAQ can suffer.

How to choose the best ETF to invest in the NASDAQ?

There are many ETFs that track the NASDAQ or a subset of it, with different characteristics, such as:

• Exposure: Some ETFs track the entire NASDAQ Composite Index, which includes over 3,000 companies, while others track the NASDAQ-100 Index, which includes the 100 largest non-financial companies on the NASDAQ. Some ETFs also focus on specific sectors or themes within the NASDAQ, such as technology, internet, biotechnology, or clean energy.
• Currency: Some ETFs are denominated in US dollars, while others are denominated in other currencies, such as euros, pounds, or francs. Some ETFs also offer currency hedging, which means that they use derivatives to reduce or eliminate the currency risk of investing in the NASDAQ.
• Cost: ETFs have different fees and expenses, such as management fees, transaction costs, and tracking errors. These can affect the performance and returns of the ETFs over time. Generally, the lower the cost, the better.

To choose the best ETF to invest in the NASDAQ, you should consider your investment objectives, risk tolerance, time horizon, and budget. You should also compare the performance, holdings, and costs of different ETFs, and read their prospectuses and factsheets carefully before investing.

These are the best NASDAQ ETFs

Here are four of the best ETFs to invest in the NASDAQ, based on their popularity, performance, and cost. These ETFs are listed on various European exchanges, such as London, Frankfurt, Milan, and Paris. You can buy and sell them through your online broker or bank.

These are the best ETFs to invest in the NASDAQ:

• iShares Nasdaq 100 UCITS ETF (Acc) ticker: CNDX
• Invesco EQQQ Nasdaq-100 UCITS ETF Acc ticker: EQQB
• iShares Nasdaq 100 UCITS ETF EUR Hedged Acc ticker: NQSE
• Invesco EQQQ Nasdaq-100 UCITS ETF ticker: EQQQ

iShares Nasdaq 100 UCITS ETF (Acc) (ticker: CNDX)

This ETF tracks the NASDAQ-100 Index, which includes the 100 largest non-financial companies on the NASDAQ. It is one of the most popular and liquid ETFs to invest in the NASDAQ, with over 8.8 billion euros in assets under management. It is denominated in US dollars, but it also has share classes in other currencies, such as euros, pounds, and francs. It does not offer currency hedging. It has a low management fee of 0.33% per year.

The ETF has delivered an annualized return of 19.27% in the past five years, outperforming the NASDAQ-100 Index by 0.06%. Its top holdings include Microsoft, Apple, Amazon, Nvidia, and Broadcom.

As of January 26, 2024, the ETF’s share price was 917.30 euros, and its year-to-date return was 4.01%.

Invesco EQQQ Nasdaq-100 UCITS ETF Acc (ticker: EQQB)

This ETF also tracks the NASDAQ-100 Index, but it has some differences from the iShares ETF. It is denominated in euros, but it also has share classes in other currencies, such as pounds and francs. It does not offer currency hedging. It has a slightly lower management fee of 0.30% per year.

The ETF has delivered an annualized return of 22.33% in the past five years, outperforming the NASDAQ-100 Index by 3.12%. Its top holdings are similar to the iShares ETF, but with slightly different weights.

As of January 26, 2024, the ETF’s share price was 273.30 euros, and its year-to-date return was 7.12%.

iShares Nasdaq 100 UCITS ETF EUR Hedged Acc (ticker: NQSE)

This ETF is similar to the iShares Nasdaq 100 UCITS ETF (Acc), but it offers currency hedging. This means that it uses derivatives to reduce or eliminate the currency risk of investing in the NASDAQ. It is denominated in euros, and it has a slightly higher management fee of 0.36% per year.

The ETF has delivered an annualized return of 14.31% in the past five years, underperforming the NASDAQ-100 Index by 4.90%. This is because the US dollar has appreciated against the euro in the past five years, which has benefited the unhedged ETFs, but not the hedged ETF. However, if the US dollar depreciates against the euro in the future, the hedged ETF may outperform the unhedged ETFs. Its top holdings are the same as the iShares ETF.

As of January 26, 2024, the ETF’s share price was 10.61 euros, and its year-to-date return was 4.04%.

Invesco EQQQ Nasdaq-100 UCITS ETF (ticker: EQQQ)

This ETF is similar to the Invesco EQQQ Nasdaq-100 UCITS ETF Acc, but it does not reinvest the dividends. Instead, it distributes them to the shareholders on a quarterly basis. This can be appealing to investors who prefer income over growth. It is denominated in US dollars, but it also has share classes in other currencies, such as euros, pounds, and francs. It does not offer currency hedging. It has the same management fee of 0.30% per year.

The ETF has delivered an annualized return of 18.97% in the past five years, outperforming the NASDAQ-100 Index by 2.76%. Its top holdings are the same as the Invesco EQQQ Nasdaq-100 UCITS ETF Acc.

As of January 26, 2024, the ETF’s share price was 274.40 euros, and its year-to-date return was 7.21%.

Conclusion

The NASDAQ is one of the most attractive and dynamic stock market indexes in the world, offering exposure to some of the most innovative and successful companies in the technology, communication, and consumer sectors. Investing in the NASDAQ can offer growth potential, diversification, and low cost, but it also comes with volatility, currency risk, and concentration risk.

One of the best ways to invest in the NASDAQ is to use ETFs, which are funds that hold a basket of securities that track an index, sector, or theme. ETFs offer diversification, liquidity, and low fees, and they trade like stocks on an exchange. There are many ETFs that track the NASDAQ or a subset of it, with different characteristics, such as exposure, currency, and cost.

In this article, we have introduced you to five of the best ETFs to invest in the NASDAQ, based on their popularity, performance, and cost. These are:

• iShares Nasdaq 100 UCITS ETF (Acc) (ticker: CNDX)
• Invesco EQQQ Nasdaq-100 UCITS ETF Acc (ticker: EQQB)
• iShares Nasdaq 100 UCITS ETF EUR Hedged Acc (ticker: NQSE)
• Invesco EQQQ Nasdaq-100 UCITS ETF (ticker: EQQQ)
• WisdomTree Physical Gold – EUR Daily Hedged (ticker: GBSE)

We have also provided some information on their current share price and past returns, as well as some tips on how to choose the right ETF for your portfolio.

We hope you have found this article useful and informative. If you have any questions or comments, please feel free to contact us. We would love to hear from you.

Thank you for reading, and happy investing!

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