The Betashares Nasdaq 100 ETF (ASX: NDQ) is one of the better-known growth exchange-traded funds (ETFs) on the ASX.
It has been around long enough that the basic story is familiar, but I still think there are good reasons to consider it today.
If I had $10,000 to invest for long-term growth, these are the three reasons the NDQ ETF would be on my shortlist.
It gives me something the ASX cannot
The first reason is simple. The Australian share market has plenty of strong businesses, but it does not have many companies operating at the front of global technology.
The NDQ ETF changes that. It gives investors exposure to large Nasdaq-listed businesses across software, semiconductors, ecommerce, digital advertising, cloud computing, biotechnology, and other areas that are difficult to access through the ASX.
This includes Apple, Nvidia, Broadcom, and Tesla.
For me, that makes the Betashares Nasdaq 100 ETF particularly attractive alongside Australian shares.
The winners can keep getting bigger
Another thing I like about the NDQ ETF is that it gives successful businesses room to become more important within the portfolio.
The Nasdaq-100 is weighted towards its largest companies, so businesses that grow into global leaders can make a meaningful contribution to returns.
Concentration is something I would think carefully about. The Betashares Nasdaq 100 ETF can become heavily influenced by a relatively small group of companies, particularly when the largest technology businesses are performing strongly.
But I do not necessarily see that as a weakness.
If I already had diversification elsewhere, I might actually want part of my portfolio focused on companies with dominant market positions and large opportunities still ahead of them.
That is a different job from a broad-market ETF, and I think the NDQ ETF can do it well.
AI is only part of the opportunity
Artificial intelligence (AI) is an obvious reason investors are interested in the Nasdaq today, but I would not want the entire investment case resting on AI.
What I want is the wider technology ecosystem around it.
More computing power means greater demand for semiconductors and data centres. Businesses are continuing to move workloads into the cloud. Digital advertising, ecommerce, cybersecurity, automation, and online services are still evolving.
Many Nasdaq-100 companies sit across several of those trends at once.
That gives the NDQ ETF more than one way to benefit as technology spending changes over time.
There will undoubtedly be periods when these shares fall, particularly if valuations become stretched or investors move away from growth stocks.
But with a long enough timeframe, I would be prepared to accept that volatility.
Foolish takeaway
For me, the NDQ ETF has a strong long-term case.
It gives investors access to some of the world’s biggest technology and growth businesses in a single ASX investment, with exposure to several trends that could keep expanding for years.
If I had $10,000 available for long-term growth, the Betashares Nasdaq 100 ETF would be one of the ETFs I would be happy to own.
The post 3 reasons I’d invest $10,000 into the NDQ ETF appeared first on The Motley Fool Australia.
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Motley Fool contributor Grace Alvino has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Apple, BetaShares Nasdaq 100 ETF, Broadcom, Nvidia, and Tesla. The Motley Fool Australia has positions in and has recommended BetaShares Nasdaq 100 ETF. The Motley Fool Australia has recommended Apple and Nvidia. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.