For investors who want technology stocks in their portfolio, Nasdaq ETF is the best option.
In the following section, we will guide you to the top 10 Nasdaq ETFs to buy in 2021, including a complete Nasdaq ETFs trading guide.
When investors talk about Nasdaq, they usually indicate a tech-heavy Nasdaq Composite Index with almost 100 companies. Companies in this group have varieties in size, quality, strugglers, and dominants.
Therefore, the top 10 Nasdaq ETFs will not only indicate the strong companies but also include strugglers with potentials. Here’s what to know about Nasdaq ETFs before investing.
What are Nasdaq ETFs?
The Nasdaq 100 index is a way to track the broader Nasdaq composite index consisting of 100 non-financial companies in the Nasdaq stock exchange.
The index comprises a broader range of companies with the world’s biggest tech stocks from biotechnology, industrial, retail and healthcare sectors. Moreover, Nasdaq 100 includes prominent companies like soft drinks maker PepsiCo Inc. and video games maker Activision Blizzard Inc.
Nasdaq ETFs tracks a pool of Nasdaq 100 shares where an investor can buy a certain amount or percentage. In Nasdaq ETFs trading, investors own the underlying assets and track their performance before selling them to investors. Nasdaq ETF is a great way to diversify the portfolio by holding and mitigating risks, focusing on the Nasdaq 100 index.
How to Trade and Invest in Nasdaq ETFs?
Open a Trading Account
First, you have to open a trading account with a broker that supports Nasdaq ETFs trading by clicking on the open a new account section. After that, you have to fill up a form with your name, email address, address, experience, etc.
Choose Nasdaq ETFs
After opening the account, you will see the list of tradable assets on the trading platform from where you have to select the list of Nasdaq ETFs. Later on, you have to select the trading instrument that you want to trade.
After that, you have to fund your account with a suitable payment method and start trading.
Place Your Trade
After getting the suitable Nasdaq ETF, it is time to trade. In ETFs trading, you can take both buy and sell positions on an intraday basis.
Therefore, you can apply any trading strategy to your favorable Nasdaq ETFs with a robust money management system.
Where Can I Trade Nasdaq ETFs?
In Nasdaq ETFs trading, you should open an account in a trading platform that supports Nasdaq ETFs. The best option is to open an account in a regulated broker that has a user-friendly trading environment.
What is the sign of a reliable broker?
A good broker always remains transparent by disclosing its trading conditions and drawbacks so that investors can get a better trading decision.
Moreover, a good broker always follows all regulatory frameworks to ensure funds’ safety and a high-quality trading environment. There are also other signs of a good broker, like deposit and withdrawal methods, live market analysis, good customer support, and education supports, etc.
Based on our study and research, we recommend the top 3 brokers in the below section; where you can start Nasdaq ETFs trading:
Best Nasdaq ETFs to Buy Now
We have prepared the following list of the best 10 Nasdaq ETFs to trade because of their excellent liquidity, historical performance, and the strong team behind them:
- Invesco QQQ Trust (QQQ)
- ProShares UltraPro QQQ (TQQQ)
- ProShares Ultra QQQ (QLD)
- ProShares UltraPro Short QQQ (SQQQ)
- ProShares Short QQQ (PQS)
- Invesco Nasdaq Internet ETF (PNQI)
- Invesco NASDAQ 100 ETF (QQQM)
- Invesco Nasdaq Next Gen 100 ETF (QQQJ)
- Simplify Growth Equity PLUS Convexity ETF (QQC)
- ProShares UltraShort QQQ (QID)
Invesco QQQ Trust (QQQ)
Invesco QQQ Trust was issued by Invesco with the biggest market value in Nasdaq ETFs. This fund focuses on US Large Cap equities with $156.79B valued assets under management.
This fund’s expense ratio is 0.20%; therefore, you have to pay $20 as a management fee for every $10,000 Investment.
The lowest annual fee, most immense market volume and most vital diversification might influence investors to include QQQ in the top 10 Nasdaq ETFs in 2021.
ProShares UltraPro QQQ (TQQQ)
ProShares UltraPro QQQ was issued by Proshares that provides a 3X leveraged exposure to the largest non-financial firms listed in Nasdaq.
TQQQ is a tactical short term instrument that is not suitable for a buy and hold approach.
The market value of this fund is $10.75B, with an expense ratio of 0.95%. Moreover, the average spread of this instrument is 0.01%, which is suitable for short-term trading.
ProShares Ultra QQQ (QLD)
ProShares Ultra QQQ was issued by Proshares that provides a 3X leveraged exposure to Nasdaq 100 stocks. The average value of the daily trading volume is $180.18M, with an overall market capitalization of $4.11B.
QLD’s average yearly return is 7.66%, which is very lucrative for investors. Therefore, you can include this instrument in the top 10 Nasdaq ETFs for 2021 if you agree on a 0.95% expense ratio.
ProShares UltraPro Short QQQ (SQQQ)
ProShares UltraPro Short QQQ is also issued by Proshares with 3X leveraged trading ability. This fund is the most volatile instrument compared to the 3 instruments discussed above. Moreover, it provides geared inverse exposure to tech-heavy Nasdaq 100.
The average market value of this instrument is $1.65B with an average expense ratio of 0.95%
ProShares Short QQQ (PQS)
ProShares Short QQQ is another Nasdaq ETF from Proshares that uses the combination of the Nasdaq 100 index. Assets under management for this fund are worth $554.04M with an expense ratio of 0.95%.
PSQ provides a yearly return of -4.3% with 15 holdings with an average daily trading volume of $45.45M. Despite the negative yearly return, this instrument is highly potential for 2021, as this ETF has some holds from potential companies.
Invesco Nasdaq Internet ETF (PNQI)
The Internet has become an important element, especially in emerging economies. Moreover, the expansion of the e-commerce industry helped in boosting internet stocks. Therefore, investors can get a decent outcome from the investment in internet ETFs, and the Invesco Nasdaq Internet ETF is a reliable option for it.
PNQI offers more than 500% gain over the year with a market cap of $1.06B. You can consider this instrument as a substantial investment opportunity for 2021 with an expense ratio of 0.60%
Invesco NASDAQ 100 ETF (QQQM)
Invesco Nasdaq 100 is the smaller version of the QQQ that includes the largest domestic and international companies listed in Nasdaq.
QQQM is suitable for holding investments, while QQQ is perfect for trading. If you trade on QQQM, you will join the $486.83M valued market capital, where the expense ratio is 0.15%.
Invesco Nasdaq Next Gen 100 ETF (QQQJ)
The Invesco Nasdaq NextGen 100 ETF invests in both Nasdaq 100 and the index’s junior varsity squad. QQQJ has almost $6.4M assets under management, with an expense ratio of 0.15%.
More than 46% of this investment comes from technology and communication, with roughly 10-11% of consumer discretion. QQQJ has less top-heavy than QQQ, where 22% of the funds came from the top 10 Nasdaq stocks.
Simplify Growth Equity PLUS Convexity ETF (QQC)
QQC seeks to invest in ETFs that track Nasdaq 100 investment with an overlay strategy. Almost 20% of the funds are allocated to its assets to options overlay that exchanges in the over-the-counter market. These funds have a non-linear relationship between funds return and the market return with a convex strategy to minimize the volatile market’s downside risk.
QQC has a 0.45% expense ratio, with $2.78M assets under management.
ProShares UltraShort QQQ (QID)
QID is an aggressive version of its sister fund PSQ that tracks the Nasdaq 100 company. Moreover, it uses the combination of futures and swaps on QQQ and Nasdaq 100 index swaps.
QID has a comparatively higher expense ratio of 0.95%, but it is not enough to diminish its popularity.
Expert Tip on Investing in Nasdaq ETFs
If you want to get the maximum benefit from the Nasdaq ETFs trading, you should focus on building a strong trading strategy. The trading strategy is an approach to anticipate a trading instrument’s price movement based on some proven calculations. Moreover, you should include fundamental aspects of the trading instrument by observing the economic condition and fundamental releases. Lastly, you can minimize controllable risks by following a strong money management and trade management system. Overall, according to your personality, a systematic approach is the only way to get the maximum benefit from the Nasdaq ETFs trading.
Why Trade Nasdaq ETFs?
The Nasdaq 100 is one of the world's major large-cap indexes that includes 100 domestic and international non-financial companies listed on the Nasdaq Stock Exchange.
Moreover, Nasdaq 100 includes world prominent tech companies like Apple (AAPL), Microsoft (MFST), Amazon (AMZN), Alphabet (GOOGL), etc.
Technology is the sector with the most potential right now. Therefore, trading in Nasdaq ETFs indicates a highly positive potential trend where making a profit is easy compared to other sectors.
Moreover, prominent tech companies might assure market stability that is often important for a trader.
Frequently Asked Questions
Invesco QQQ Trust (QQQ) is the number one Nasdaq ETF based on the market capitalization, expense ratio, and price stability.
Nasdaq ETFs track the top 100 non-financial stocks’ performance in the Nasdaq Stock Exchange that indicates it is a good investment opportunity.
Both retail and institutional traders invest in Nasdaq ETFs.
A share is a stock unit, while Nasdaq ETFs are a basket of stocks that track Nasdaq 100 shares. In Nasdaq ETFs trading, traders can buy and sell the position on an intraday basis, which is impossible in shares trading.
As Nasdaq ETFs are based on prominent tech companies, it is perfect for beginner traders to start trading.
The total size of the Nasdaq ETF is not available right now.