Best Nasdaq ETFs for 2024

Jitanchandra Solanki
11 Min read

The NASDAQ is the second largest stock exchange by trading volume worldwide, beaten only by the New York Stock Exchange. This article explains what NASDAQ ETFs are along with the pros and cons of investing in them, as well as provides a list of NASDAQ ETFs to watch this year.

Key Takeaways

  • The NASDAQ is a stock exchange based in New York which lists over 3,000 companies. Often when investors mention the NASDAQ, they refer to the NASDAQ 100, which are the 100 largest companies listed on the NASDAQ Stock Exchange.
  • The total market capitalisation of all the equities on the NASDAQ is over $20 trillion, featuring a total trading volume of more than $1.8 trillion so in 2023. 
  • NASDAQ ETFs are Exchange-Traded Funds that investors can buy to gain exposure to many companies on the NASDAQ through one transaction.

What are NASDAQ ETFs?

NASDAQ ETFs are Exchange-Traded Funds that limit themselves to companies listed on the NASDAQ Exchange. The NASDAQ Exchange is a stock exchange based in New York City, and the largest stock exchange in the United States based on volume. The NASDAQ features many technology companies like Apple and Microsoft.

An ETF is a fund that is traded on a stock exchange. Investors can buy ETFs at their broker of choice, and they cover a variety of different themes. An ETF can be thought of as a collection of different equities that are put together in a basket by an investment management company, in which you can buy shares of. By buying the ETF, the investor buys a small part of the performance of each stock within the ETF.

It is important to note the distinction between the NASDAQ and the NASDAQ 100. Oftentimes ‘the NASDAQ’ is used by investment analysts as a shorthand for the NASDAQ 100, which are the largest 100 stocks listed on the NASDAQ Exchange. The NASDAQ 100 is therefore a stock market index.

The NASDAQ itself, however, is just a stock exchange, which lists over 3,000 different companies. Investors researching NASDAQ ETFs should therefore note whether a given ETF restricts itself to the NASDAQ 100, or focuses on the NASDAQ as a whole.

Best NASDAQ ETFs to Watch

Below is a list of some of the best NASDAQ ETFs to watch. It should be noted that any investment decision should always be based on personal factors like risk appetite and the investor’s financial situation. This list of the best NASDAQ ETFs is subjective, and investors would do well to perform their own research.

  1. iShares NASDAQ 100 UCITS ETF – Fund that invests in the 100 largest stocks on the NASDAQ Stock Exchange
  2. First Trust NASDAQ 100 Technology Index Fund ETF – Equally-weighted fund that invests in just the technology companies in the NASDAQ 100
  3. First Trust NASDAQ Technology Dividend Index Fund ETF – Fund that invests in dividend-paying companies that are listed on the NASDAQ stock exchange

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iShares NASDAQ 100 UCITS ETF 

iShares ETFs are issued by BlackRock, an asset manager with around $9 trillion in assets under management. The iShares NASDAQ 100 UCITS ETF invests in the largest 100 non-financial companies listed on the NASDAQ exchange. As the NASDAQ features many tech companies, the capital in this fund is invested roughly 50% into the IT sector.

The top 10 holdings of the iShares NASDAQ 100 UCITS ETF in order of weighting are: Apple Inc (~11.2%), Microsoft Corp (~10.2%), Amazon Com Inc (~5.6%), NVIDIA Corp (~4.3%), Meta Platforms Inc Class A (~3.8%), Broadcom Inc (~3%), Alphabet Inc Class A (~3%), Alphabet Inc Class C (~3%), Tesla Inc (~2.9%), and Adobe Inc (~2.2%).

The main economic sectors this fund invests in are IT (~50%), communications (~16%), and luxury consumer goods (~14%). The rest of the fund's capital is spread over healthcare (~7%), basic consumer goods (~6%), and industrials (~5%), among other sectors.

First Trust NASDAQ 100 Technology Index Fund ETF

The First Trust NASDAQ 100 ETF is issued by First Trust, an investment management company headquartered in the State of Illinois in the United States. This ETF specifically tracks the companies in the NASDAQ that are classified as technology companies according to the Industry Classification Benchmark (ICB). As such, this fund is entirely invested in the information technology sector.

The top 10 holdings in the First Trust NASDAQ 100 Technology Index ETF are CrowdStrike Holdings Inc Class A (~3.6%), PDD Holdings Inc (~3.5%), Zscaler Inc (~3.14%), Advanced Micro Devices Inc (~3.1%), Palo Alto Networks Inc (~3.1%), Datadog Inc Class A (~2.9%), Synopsys Inc (~2.9%), Qualcomm Inc(~2.9%), KLA Corporation (~2.9%), and Adobe Inc (~2.9%).

The allocations are all of comparable size because this is an equally weighted fund, meaning that each company in the index is invested in the same amount of capital. Rebalancing of the assets occurs four times a year.

All of this NASDAQ ETF’s capital is allocated to IT companies, with the following sub-sectors: software (~41%), semiconductors (~34%), production technology equipment (~11%), and consumer digital services (~9%). Computer hardware and computer services account for the remaining 5% of capital.

With Admirals, you can trade the First Trust NASDAQ 100 Technology Index ETF CFD. CFDs, or contracts for difference, are derivative contracts that track the underlying price of an asset. This enables investors to trade long and short using leverage. Learn more in The CFD Trading Guide.

First Trust NASDAQ Technology Dividend Index Fund ETF

The First Trust NASDAQ Technology Dividend Index ETF focuses on technology companies listed on the NASDAQ Stock Exchange that specifically pay dividends. The inclusion criteria are complicated, featuring among other things a minimum market capitalisation of $500 million, a minimum daily trading volume of $1 million, and a dividend payment for the past 12 months with a yield of at least 0.5%.

The top 10 holdings in the First Trust NASDAQ Technology Dividend Index ETF are: Microsoft Corp (~8.9%), International Business Machines Corp (~8.6%), Broadcom Inc (~8%), Texas Instruments Inc (~7.3%), Oracle Corp (~6.9%), QUALCOMM Inc (~4.5%), Analog Devices Inc (~3.3%), Motorola Solutions Inc (~2.2%), Rogers Communications Inc Class B (~2.2%), and Verizon Communications Inc (~2.1%).

The main economic sectors represented in this NASDAQ ETF are semiconductors and semiconductor equipment (~36%), software (~20%), IT services (~10%), and diversified telecommunication services (~7%). The rest of the fund’s capital is spread in smaller amounts over several other sectors, including technology hardware, storage & peripherals (~7%), communications equipment (~6%), and wireless telecommunication services (~4%), and other sub-sectors.

With Admirals, you can trade the First Trust NASDAQ Technology Dividend Index ETF CFD

How to Invest in NASDAQ ETFs

With Admirals, you can invest in real stocks and ETFs, as well as trade CFDs on stocks and ETFs, with the following commissions:

  • UK stocks and ETFs – 0.1% of trade value, 1 GBP minimum commission.
  • US stocks and ETFs – From $0.02 per share, 1 USD minimum commission.
  • France/Germany stocks and ETFs - 0.1% of trade value, 1 EUR minimum commission.

You can learn more about trading and investing commissions on the Admirals Contract Specification page. You can search for global stocks and ETFs from the MT5 web platform and invest in four steps:

  1. Open an account with Admirals.
  2. Click on Trade on one of your live or demo trading accounts to open the web platform.
  3. Search for your symbol at the top of the search window.
  4. Click Create New Order in the bottom window to open a trading ticket to input your trade size, stop loss and take profit level.
Source: Example of a chart and trading ticket from the Trade.MT5 web trading platform. Illustrative purposes only. Date captured: 22 December 2023.

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Investing in NASDAQ ETFs: Pros & Cons

The NASDAQ 100 is a well-known index of the largest 100 technology companies listed on the NASDAQ Exchange. Investors interested in adding technology companies to their portfolio may consider NASDAQ ETFs, as most large American tech companies like Apple, Microsoft, NVIDIA, and even Tesla are listed on the NASDAQ.

Technology is not the only sector represented on the NASDAQ, however. Other sectors like healthcare, consumer services, and biotechnology also account for a certain number of companies listed on the NASDAQ. Buying into a NASDAQ ETF can be a way to add a level of diversification to a portfolio.

However, technology companies can be notoriously volatile and are highly sensitive to changes in interest rate policy. While there are times this can lead to returns which are above the market average, there will be times when these stocks will be hit the hardest such as in a recession or higher interest rate environment. Investors who invest in NASDAQ ETFs should be mindful of their risk appetite.

Another factor to take into consideration is that NASDAQ ETFs are strongly focused on technology. The amount of diversification a NASDAQ 100 ETF provides is therefore less than the diversification of a general market index like the S&P 500, which invests more broadly in many sectors.

Continue Reading:

FAQs on Best NASDAQ ETFs

 

Which ETF tracks NASDAQ?

There are many ETFs on the market which track the NASDAQ. Some NASDAQ ETFs listed in this article are examples of NASDAQ 100 ETFs, which focus solely on the 100 most actively traded stocks on the NASDAQ. The First Trust NASDAQ Technology Dividend Fund is an example of a NASDAQ ETF that does not restrict itself to the NASDAQ 100, as its focus lies on companies that are listed on the NASDAQ and pay a dividend.

 

What is the ETF ticker that allows you to trade NASDAQ-100?

There are different options for investing in the NASDAQ 100 through ETFs. Investors in Europe might look for NASDAQ 100 ETFs with UCITS certification, like the iShares ETF listed in this article. That ETF has the ticker CNDX, but there are many other ETFs by other investment management companies that focus on the NASDAQ 100.

 

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1. This is a marketing communication. The content is published for informative purposes only and is in no way to be construed as investment advice or recommendation. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research, and that it is not subject to any prohibition on dealing ahead of the dissemination of investment research.

2. Any investment decision is made by each client alone whereas Admirals shall not be responsible for any loss or damage arising from any such decision, whether or not based on the content.

3. With view to protecting the interests of our clients and the objectivity of the Analysis, Admirals has established relevant internal procedures for prevention and management of conflicts of interest.

4. The Analysis is prepared by an independent analyst (Jitanchandra Solanki, hereinafter “Author”) based on personal estimations.

5. Whilst every reasonable effort is taken to ensure that all sources of the content are reliable and that all information is presented, as much as possible, in an understandable, timely, precise and complete manner, Admirals does not guarantee the accuracy or completeness of any information contained within the Analysis.

6. Any kind of past or modelled performance of financial instruments indicated within the content should not be construed as an express or implied promise, guarantee or implication by Admirals for any future performance. The value of the financial instrument may both increase and decrease and the preservation of the asset value is not guaranteed.

7. Leveraged products (including contracts for difference) are speculative in nature and may result in losses or profit. Before you start trading, please ensure that you fully understand the risks involved.

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