The Nasdaq inventory change accommodates among the most engaging investments on the inventory market, together with shortly rising tech names. Buyers can personal all of them by buying a Nasdaq index fund, making it straightforward to personal such bellwethers because the Magnificent 7 shares. However quite a lot of such funds exist, and also you wish to watch out about what precisely you’re shopping for.
Listed below are some high Nasdaq exchange-traded funds (ETFs) and key issues you must search for.
6 high Nasdaq ETFs
The funds under make investments primarily within the Nasdaq 100 index, which incorporates the most important 100 non-financial shares buying and selling on the Nasdaq inventory change — firms corresponding to Apple, Amazon, Microsoft, Alphabet, Meta Platforms, Netflix and lots of extra. Don’t get that confused with the Nasdaq Composite, an index which incorporates all shares buying and selling on that change.
Different ETFs under embrace leveraged funds and quick funds. Leveraged funds enable traders to probably make a bigger return than what’s delivered by the index itself. Quick funds let traders wager towards the index, permitting them to revenue when the index falls. (Information as of April 10, 2025.)
Invesco QQQ Belief (QQQ)
This fund goals to imitate the Nasdaq 100 index, although it’s truly dramatically outperformed that index.
- Annual returns (5 years): 19.1 %
- Expense ratio: 0.20 %
Invesco Nasdaq 100 ETF (QQQM)
This fund — additionally from Invesco — tracks the Nasdaq 100, too, nevertheless it does it at even decrease price. The fund has not existed for 5 years, however its three-year returns are similar to these of the QQQ ETF.
- Annual returns (3 years): 10.9 %
- Expense ratio: 0.15 %
ProShares UltraPro QQQ (TQQQ)
This leveraged fund makes use of derivatives to amp up the return of the Nasdaq 100, and it targets a each day return of 3 times that index. It additionally prices a more healthy expense ratio for that profit.
- Annual returns (5 years): 32 %
- Expense ratio: 0.84 %
Direxion Nasdaq-100 Equal Weighted ETF (QQQE)
This fund holds an equal weighting within the Nasdaq 100 shares quite than the everyday weighting that’s closely skewed to the most important tech shares.
- Annual returns (5 years): 13.1 %
- Expense ratio: 0.35 %
ProShares UltraPro Quick QQQ (SQQQ)
This fund goes up because the Nasdaq 100 goes down, permitting you to short-sell the index in a handy fund.
- Annual returns (5 years): -54.1 %
- Expense ratio: 0.95 %
Constancy Nasdaq Composite Index ETF (ONEQ)
This moderately priced fund tracks the Nasdaq Composite (not the Nasdaq 100), so traders get broader publicity to that bigger index and fewer focus within the largest tech shares.
- Annual returns (5 years): 17.1 %
- Expense ratio: 0.21 %
Dangers of ETFs
ETFs will be a beautiful strategy to make investments out there, permitting you to get the return of a selected index, however they nonetheless have drawbacks.
- Volatility: Identical to particular person shares, a inventory ETF will be extremely unstable, although it tends to be much less so than single shares. You’ll want to know that shares can go wherever within the quick time period and also you’ll have to carry on for years to benefit from the sturdy long-term returns.
- Monitoring threat: A fund monitoring a selected index could not precisely ship the returns of that index — that’s known as monitoring threat. Within the case of some funds above, that’s truly labored in traders’ favor, because the funds have dramatically outpaced their index. But it surely may simply as simply work within the different path, with the fund unable to trace its goal.
- Structural prices: Leveraged and quick funds have further prices by their very nature, as their by-product positions expire and should be re-established frequently. These prices result in a drag on their returns over time, even when they carry out effectively.
The Nasdaq 100 is a well-liked inventory index, however traders produce other well-liked decisions, particularly if they need broader diversification than simply the most important tech shares. The preferred index is the Customary & Poor’s 500, which incorporates shares throughout each main trade. Funds from the S&P 500 and the Nasdaq 100 repeatedly rank among the many finest ETFs, providing excessive returns and low price.
Backside line
ETFs can let you spend money on the Nasdaq inventory index shortly and simply, providing a simple means to harness the sturdy returns obtainable there. However be sure you perceive precisely what you’re shopping for and whether or not it matches your funding aims and threat tolerance. Work with among the finest brokers for ETF investing for a robust vary of options that may assist you succeed.
Editorial Disclaimer: All traders are suggested to conduct their very own unbiased analysis into funding methods earlier than investing resolution. As well as, traders are suggested that previous funding product efficiency isn’t any assure of future worth appreciation.
