Best Nasdaq ETFs UK to Watch

Finding the right investment vehicle for your retirement fund or for any other long-term monetary goal can be tough. ETFs seem like logical choices for many; after all, many ETFs track the broader performance of the stock market. So, What about the Nasdaq? The Nasdaq is typically regarded as a barometer for the health of the broader market. Are there Nasdaq ETFs to invest in, and if so, what are some popular Nasdaq ETFs that one could research in 2022?

Today, let’s break down each of these questions and more.

12 Popular Nasdaq ETFs in the UK List

Not sure which Nasdaq ETF to research? Check out this quick breakdown of 10 popular Nasdaq ETFs based on trading volumes and market capitalizations:

1. iShares Nasdaq 100 UCITS ETF (CNDX)
2. SPDR S&P 500 ETF (SPY)
3. Invesco QQQ Trust (QQQ)
4. iShares Nasdaq Biotech ETF (IBB)
5. Invesco Nasdaq 100 ETF (QQQM)
6. Invesco Nasdaq Next Gen 100 ETF (QQQJ)
7. Ark Genomic Revolution (ARKG)
8. Vanguard Growth ETF (VUG)
9. iShares MSCI USA Min Vol Factor ETF (USMV)
10. Schwab US Small-Cap ETF (SCHA)
11. Vanguard FTSE All-World ex-US ETF (VEU)
12. Vanguard FTSE Emerging Markets ETF (VWO)

Nasdaq ETFs UK Reviewed

Let’s break down the 10 popular Nasdaq ETFs for 2022.

1. iShares Nasdaq 100 UCITS ETF (CNDX)

The Nasdaq-100 tracks the 100 biggest non-financial businesses that make up the Nasdaq stock exchange, weighted according to their market caps. The iShares Nasdaq 100 UCITS ETF (CNDX) gives investors targeted exposure to the non-financial stocks listed on the NASDAQ exchange.

In terms of annualised performance, for the past year the iShares Nasdaq 100 UCITS ETF has wrapped up returns of 28.99%. As for the fund’s holdings, these include Apple Inc (11%), Microsoft Corp (9.96%), Amazon Corp Inc (7.82%), and Tesla Inc (4.53%).

If you’re looking to gain exposure to a variety of sectors then the CNDX ETF doesn’t disappoint. Investing in this index fund ETF means you’ll be buying into a fund that’s made up of 48.36% information tech stocks, 17.28% consumer discretionary stocks, and 6.61% health care stocks just to name a few.

2. SPDR S&P 500 ETF (SPY)

The S&P 500 is a list of the 500 most important companies to the US (and oftentimes by extension, the worldwide) market.

Should you invest in this ETF, you’ll broadly track the performance of the wider market.

3. Invesco QQQ Trust (QQQ)

Next up is another high-quality ETF: QQQ, the ticker symbol for Invesco QQQ ETF. This specifically tracks the Nasdaq-100, which we describe below. While it’s not nearly as diversified as ETFs like SPY, it’s still a fantastic choice if you want to track the broader performance of the market while focusing your investments on technology companies.

Tech investments have done phenomenally over the last few decades. Indeed, over the last few years, QQQ has returned over 25% annually compared to the 17% seen by SPY.

4. iShares Nasdaq biotechnology ETF (IBB)

The iShares Biotechnology ETF is designed to mirror the performance of an index of biotechnology stocks listed in the United States. As the name suggests, the IBB ETF offers broad exposure to the healthcare and biotechnology sectors of the Nasdaq stock market. The iShares Nasdaq Biotechnology ETF (IBB) is a passively managed ETF created on 02/05/2001.

Passively managed ETFs, which are becoming more popular among individual and institutional investors, offer low expenses, transparency, flexibility, and tax efficiency; they are also potential long-term investment vehicles. Blackrock is the fund’s sponsor. It is one of the largest ETFs designed to track the performance of the Healthcare – Biotech industry of the equity market, with assets exceeding $10.22 billion. IBB aims to mimic the Nasdaq Biotechnology Index’s performance before fees and expenditures.

Costs are an important metric to consider when choosing the right ETF, and cheaper funds can outperform their more expensive counterparts. This ETF’s annual operating expenses are 0.45 percent and it has a trailing dividend yield of 0.22 percent over the last 12 months.

5. Invesco Nasdaq 100 ETF (QQQM)

The QQQM ETF launched at the end of 2020 and is, essentially, a cheaper version of the QQQ ETF from Invesco. It’s a very liquid fund and changes hands fairly frequently.

As an ETF, it is focused on buy-and-hold investors focused on cost savings analyses. In general, this is a Nasdaq ETF to research if you want to invest in the Nasdaq-100 and let your money sit there for quite a while. Depending on how well tech stocks do over the next few decades.

6. Invesco Nasdaq Next Gen 100 ETF (QQQJ)

The Invesco Nasdaq Next Gen 100 ETF doesn’t invest in the Nasdaq-100 as you might think. Instead, it tracks the next 100 largest non-financial stocks. This necessarily makes it quite cheaper than the alternative QQQ ETFs.

That said, this ETF is still dominated by 46% tech stocks in its portfolio. But it’s still a little more diversified because communication and consumer direction stocks comprise a much larger slice of its ETF pie.

7. Ark Genomic Revolution (ARKG)

ARKG is an actively managed ETF, so it has a higher than average expense ratio. In total, you’ll pay 0.75% annually to own shares in this ETF. The fund invests in high-risk and high-reward healthcare and biotech companies.

There are usually between 30 and 50 stocks in this ETF at any time and stock turnover is frequent, so you’ll need to be a little more active with this ETF than with the others.

8. Vanguard Growth ETF (VUG)

Vanguard’s Growth ETF is exactly what it sounds like: an ETF for investors who want their portfolios to grow more than they care about short-term dividends. It invests in times of large and popular companies like Apple and Microsoft, but it also has a very low expense ratio. You’ll pay around $4 per year for owning $10,000 of VUG shares.

9. iShares MSCI USA Min Vol Factor ETF (USMV)

If you dislike the inherent volatility of the stock market, this ETF has your name on it. It invests in stocks that have very low volatility, including Kroger, Johnson & Johnson, and Waste Management: all stable companies with a history of long-term success.

10. Schwab US Small-Cap ETF (SCHA)

Schwab’s US Small-Cap ETF is a Nasdaq ETF if you want to limit your portfolio’s exposure to larger stocks and instead want to focus on smaller stocks. Yet it also offers exposure to the broader market thanks to its extreme diversification.

Odds are that this ETF’s value won’t crash unless something drastic happens in the next couple of years. It includes major holdings like 10x Genomics and Darling Ingredients, which turns various animal byproducts into useful commercial ingredients or products.

Nasdaq ETFs Explained

In a nutshell, the Nasdaq is an electronic marketplace or exchange for buying and selling securities. It first began in 1971 and is now the largest global marketplace for buying and trading stocks, ETFs, and many other types of market securities.

Nasdaq ETFs are simply exchange-traded funds listed on the Nasdaq. Exchange-traded funds are essentially groups of stocks or other securities that investors can buy shares of.

Imagine a group of shares from three companies collected into a single ETF. An investor wants to invest in all three of those companies at the same time but doesn’t want to weight their portfolio too much in a single company in case one of the organizations has a bad quarter.

So instead of investing in each company individually, they choose to invest in the ETF. In doing so, they purchase a share of the ETF and own a very small percentage of each company included in the ETF. ETFs are generally safe investments because they limit exposure to individual stocks or securities.

Fundamentals of Nasdaq ETFs

 ETFs that track the NASDAQ certainly can be worth adding to your portfolio, but it depends on your investment goals and what securities a given ETF includes in its portfolio.

Generally speaking, the “Nasdaq” refers to the Nasdaq Composite index, which includes over 2500 distinct companies or corporations. One of the advantages of investing in the Nasdaq through an ETF is that the companies can vary widely in terms of size, quality, market presence, and even industry focus.

Any given ETF will probably be comprised of multiple distinct companies that allow the ETF’s value to grow with the market regardless of the performance of any individual part of the ETF’s portfolio.

The above-mentioned QQQ and QQQM ETFs specifically target the Nasdaq-100. Compared to the market average, the Nasdaq-100 has underperformed. For example, the Nasdaq-100 provided a market return of a little over 30% over the last 12 months as of August 2021, compared to the S&P 500’s return of 31.4%.

Frequently Asked Questions on NASDAQ ETFs