What are the best Nasdaq ETFs to watch in 2023?

Decide which is the best Nasdaq ETF for you

Data as of 18 July 2023. Source: Google Finance, ETFDB.

*The list of funds mentioned is ranked by assets under management (AUM). When deciding what ETFs to feature, we analyse the financials, recent news, state of the industry, and whether or not they are actively traded on Stake.

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Discover the top Nasdaq ETFs to add to your watchlist

1. Invesco QQQ Trust ($QQQ)

Assets under management (AUM): US$211b

Stock price (as of 18/07/2023): US$385.74

Stake Platform Bought / Sold (1 Jan 2023 - 18 Jul 2023): 70% / 30%

The Invesco QQQ Trust is one of the most popular and widely traded ETFs. It aims to track the performance of the NASDAQ-100 Index, which includes 100 of the largest non-financial companies listed on the NASDAQ exchange. $QQQ provides investors with exposure to major technology and growth companies, including industry giants such as Apple ($AAPL), Microsoft ($MSFT), Amazon ($AMZN), and Alphabet ($GOOG). These companies have been at the forefront of driving innovation and growth in the tech sector.

Investors often choose $QQQ for its low expense ratio, making it cost-effective for long-term investments. The ETF offers diversification across various sectors, with a heavy emphasis on technology, consumer discretionary, and communication services. This broad exposure to leading companies in the NASDAQ-100 Index makes QQQ an attractive option for investors seeking long-term growth potential and exposure to technology and innovation.

$QQQ has a history of strong performance, outperforming many other broad market indices. However, it's important to note that $QQQ is more volatile compared to broader market ETFs, as it is heavily weighted towards technology stocks. Investors should consider their risk tolerance and investment objectives before allocating a significant portion of their portfolio to QQQ.

🆚 Use the stock comparison tool to compare QQQ vs QQQM→

2. iShares NASDAQ 100 ETF ($QQQM)

Assets under management (AUM): US$14b

Stock price (as of 18/07/2023): US$158.7

Stake Platform Bought / Sold (1 Jan 2023 - 18 Jul 2023):  78% / 22%

The Invesco NASDAQ 100 ETF, $QQQM, is another of the ETFs tracking the performance of the NASDAQ-100 Index. Similar to $QQQ, it offers investors exposure to the top 100 non-financial companies listed on the NASDAQ exchange. $QQQM provides a cost-effective option for investors with a lower expense ratio compared to $QQQ. It allows investors to gain broad-based exposure to the NASDAQ-100 Index, which includes prominent technology, consumer discretionary, and communication services companies.

The fund invests in a diversified portfolio of well-established companies across various sectors. It can be an attractive choice for investors seeking long-term growth potential and exposure to the NASDAQ-100 Index at a lower expense. However, investors should carefully evaluate their investment goals, risk tolerance, and preference for expense ratios before deciding between $QQQ and $QQQM.

3. Global X NASDAQ 100 Covered Call ETF ($QYLD)

Assets under management (AUM): US$8.21b

Stock price (as of 18/07/2023): US$18.05

Stake Platform Bought / Sold (1 Jan 2023 - 18 Jul 2023):  79% / 21%

$QYLD is an ETF that employs a covered call strategy on the NASDAQ-100 Index. It aims to provide investment results that correspond generally to the performance of the CBOE NASDAQ-100 BuyWrite V2 Index. This strategy involves holding a portfolio of securities from the NASDAQ-100 Index while selling call options on a portion of the portfolio. The premium received from the options can generate income for investors.

The fund's covered call strategy may appeal to income-oriented investors who seek enhanced yield potential. By selling call options, the ETF collects premiums, which can supplement dividend income from the underlying securities. However, it's important to note that the covered call strategy limits potential gains if the price of the underlying securities rises significantly.

Investors considering $QYLD should understand the trade-off between potential income generation and potential limitations on capital appreciation. The ETF offers exposure to the NASDAQ-100 Index with an income-focused approach, making it suitable for investors seeking a balance between income and growth potential.

🆚 Use the stock comparison tool to compare QYLD vs NUSI→

4. Fidelity Nasdaq Composite Index Tracking Stock ($ONEQ)

Assets under management (AUM): US$5.11b

Stock price (as of 18/07/2023): US$56.37

Stake Platform Bought / Sold (1 Jan 2023 - 18 Jul 2023): Not available

$ONEQ is an ETF designed to track the performance of the NASDAQ Composite Index, which consists of a broad range of companies listed on the NASDAQ exchange. The index includes not only the largest non-financial companies but also smaller and mid-cap companies across various sectors. This ETF provides investors with exposure to the overall performance of the NASDAQ stock market.

The Fidelity Nasdaq Composite Index offers diversification across sectors and market capitalisations. It includes companies from technology, healthcare, consumer discretionary, and other sectors, making it suitable for investors looking for a broader representation of the NASDAQ market. However, it's important to note that ONEQ's performance may differ from that of the NASDAQ-100 Index due to its broader composition.

Investors who prefer a more comprehensive exposure to the NASDAQ stock market, including smaller and mid-cap companies, may find this ETF appealing. It allows investors to participate in the potential growth of a wide range of companies listed on the NASDAQ exchange.

5. Invesco NASDAQ Internet ETF ($PNQI)

Assets under management (AUM): US$3.03b

Stock price (as of 18/07/2023): US$33.40

Stake Platform Bought / Sold (1 Jan 2023 - 18 Jul 2023): Not available

$PNQI is an ETF that focuses on companies primarily involved in the internet and digital commerce sectors. It seeks to track the performance of the NASDAQ Internet Index, which includes companies engaged in various internet-related activities such as e-commerce, online content, social media, and online advertising.

This ETF offers targeted exposure to the information technology sector, which has been a source of significant growth and innovation. The fund’s assets include well-known companies such as Amazon ($AMZN), Meta Platforms ($META), Netflix ($NFLX), and Alphabet ($GOOG). By investing in $PNQI, investors can gain exposure to companies that have played a crucial role in transforming how we communicate, shop, and consume information in the digital age.

Investors seeking specific exposure to the internet and digital commerce sectors may find this ETF attractive. However, it's important to note that investing in a sector-specific ETF like $PNQI concentrates risk within a particular industry. Investors should carefully consider their risk tolerance, portfolio diversification, and investment goals before allocating a significant portion of their portfolio to a single sector and consider diversifying their resources across different asset classes.

6. First Trust NASDAQ-100 Equal Weighted Index Fund ($QQEW)

Assets under management (AUM): US$1.97b

Stock price (as of 18/07/2023): US$111.40

Stake Platform Bought / Sold (1 Jan 2023 - 18 Jul 2023): Not available

$QQEW is an ETF that aims to replicate the performance of the NASDAQ-100 Equal Weighted Index. Unlike traditional market-cap-weighted indices, its benchmark index assigns an equal weight to each of the index's components, providing a more balanced representation of the underlying companies.

This ETF offers exposure to the same companies as the NASDAQ-100 Index but without the heavy concentration on the largest companies. This equal-weighted approach provides more significant exposure to smaller and mid-cap companies within the index. It can attract investors seeking a different risk and return profile compared to traditional market-cap-weighted ETFs.

By providing equal weight to all index components, the fund may offer enhanced diversification across companies and sectors.

7. Direxion NASDAQ-100 Equal Weighted Index Shares ($QQQE)

Assets under management (AUM): US$1.18b

Stock price (as of 18/07/2023): US$80.24

Stake Platform Bought / Sold (1 Jan 2023 - 18 Jul 2023):  47% / 53%

$QQQE is another ETF that seeks to replicate the performance of the NASDAQ-100 Equal Weighted Index. Similar to $QQEW, $QQQE offers investors exposure to the NASDAQ-100 Index but with an equal-weighted methodology and a lower expense ratio than its biggest competitor. This methodology assigns the same weight to each stock in the index, irrespective of the company's market capitalisation.

The fund’s equal-weighted approach provides a different risk and return profile compared to traditional market-cap-weighted ETFs like $QQQ. It offers greater exposure to smaller and mid-cap companies within the NASDAQ-100 Index. By equally distributing the weight across all index constituents, this ETF may provide enhanced diversification and potentially capture the performance of underrepresented companies.

Investors who prefer a balanced representation of the NASDAQ-100 Index, with a focus on smaller and mid-cap companies, may consider $QQQE. The ETF can be suitable for investors seeking a different risk and return profile than what is offered by market-cap-weighted ETFs.

🆚 Use the stock comparison tool to compare QQQE vs QQEW→

8. Invesco NASDAQ Next Gen 100 ETF ($QQQJ)

Assets under management (AUM): US$750m

Stock price (as of 18/07/2023): US$26.88

Stake Platform Bought / Sold (1 Jan 2023 - 18 Jul 2023): 78% / 22%

$QQQJ is an ETF that provides exposure to the NASDAQ Next Generation 100 Index. This index includes 100 companies that are not part of the NASDAQ-100 Index but are considered to be innovative and fast-growing. This ETF focuses on companies with smaller market capitalisations and emphasises growth potential in sectors such as biotechnology, fintech, cloud computing, and other emerging industries.

Investors seeking exposure to up-and-coming companies with high growth potential may find $QQQJ appealing. By investing in this fund, investors can potentially gain exposure to innovative companies that may not yet be part of the larger, more established companies in the NASDAQ-100 Index.

The inclusion of smaller companies in this fund may increase the overall risk and volatility of the ETF compared to more established indices. However, it also offers the opportunity for potentially higher returns. Investors should carefully assess their risk tolerance and investment objectives before considering an investment in this ETF.

9. Nationwide Nasdaq-100 Risk-Managed Income ETF ($NUSI)

Assets under management (AUM): US$457m

Stock price (as of 18/07/2023): US$22.18

Stake Platform Bought / Sold (1 Jan 2023 - 18 Jul 2023): 53% / 47%

$NUSI is an ETF that aims to provide investors with income generation while managing downside risk. It utilises an options strategy to generate income by selling covered call options on Nasdaq-100 stocks. The ETF also seeks to mitigate downside risk by purchasing out-of-the-money put options on the same portfolio.

The fund’s options strategy allows investors to potentially generate income from options premiums while providing a degree of downside protection. $NUSI aims to track the Nasdaq-100 index while still being able to provide attractive income levels, making it suitable for income-oriented investors.

Investors considering this exchange-traded fund should understand the trade-offs involved. While the options strategy can generate income and mitigate downside risk, it also limits the potential for significant capital appreciation. It's crucial to carefully review the ETF's prospectus and understand the specific options strategy employed before investing.

10. First Trust NASDAQ-100 Ex-Technology Sector Index Fund ($QQXT)

Assets under management (AUM): US$194m

Stock price (as of 18/07/2023): US$87.25

Stake Platform Bought / Sold (1 Jan 2023 - 18 Jul 2023): Not available

$QQXT is an ETF that provides exposure to the NASDAQ-100 Ex-Technology Sector Index. This is an index composed of companies listed on the NASDAQ-100 Index but excludes those classified as technology companies.

By excluding technology companies, the ETF may offer a different risk and return profile compared to traditional technology-focused ETFs. Investors seeking a balanced allocation across sectors within the NASDAQ-100 Index may find $QQXT appealing.

However, it's important to note that excluding the technology sector can also mean missing out on potential growth opportunities. Investors should carefully consider their risk tolerance, investment goals, and desired sector exposure before investing in this fund or any other sector-specific ETF.

How to invest in Nasdaq 100?

Want to start investing in the Nasdaq 100, but not sure how? Learn how to buy Nasdaq 100 ETFs on the Stake investing platform below.

1. Find a stock investing platform

To buy shares in Nasdaq ETFs, you'll need to sign up to an investing platform with access to the U.S. stock market, where these ETFs trade. There are a number of online investing platforms in Australia, of which Stake is one.

2. Fund your account

Complete an application with your personal and financial details. Fund your brokerage account with a bank transfer, debit card or even Apple/Google Pay.

3. Search for an ETF

Find the desired index fund by name or ticker symbol. Do your own research to ensure it is the right investment product for your own circumstances.

4. Choose an order type and buy Nasdaq ETF shares

Buy on any trading day with a market order or use a limit order to delay your purchase of the ETFs shares until it reaches your desired price. Look into dollar cost averaging to spread out your risk, which smooths out buying at consistent intervals.

5. Monitor your investment

Optimise your portfolio by tracking how your stock and the business perform with an eye on the long term. You may be eligible for dividends and shareholder voting rights that affect your stock.

✅ Gain access to U.S. ETFs from $3 brokerage when you sign up to Stake.

What is the best-performing Nasdaq ETF?

This year’s best-performing Nasdaq ETF is the iShares NASDAQ 100 ETF ($$QQQM), returning 45.93% to its shareholders from 01/01/2023 to 18/07/2023.

What is the best Nasdaq ETF on the ASX?

The largest Nasdaq ETF on the ASX in terms of market capitalisation is the BetaShares Nasdaq 100 ETF ($NDQ). However, it's important to note that bigger is not always better when it comes to ETFs.

Different ETFs may be more suitable for investors based on their specific needs, preferences, and investment goals. Factors such as diversification, expense ratios, tracking error, and sector exposure should be considered when selecting an ETF. It is recommended to conduct thorough research before making investment decisions.

This does not constitute financial product advice nor a recommendation to invest, it is for informational purposes only. Past performance is not a reliable indicator of future performance. As always, do your own research and consider seeking appropriate financial or taxation advice from a licensed adviser before investing.