All about investing in NASDAQ 100

NASDAQ (National Association of Securities Dealers Automated Quotations) is an American securities exchange with headquarters in New York, USA.

The NASDAQ 100 index is one of the  pre-eminent large cap indices on the NASDAQ stock exchange.

The unique feature of NASDAQ 100 is that it focuses on modern-day industrials and tech companies and does not include financial companies. It is an index of 100 stocks currently comprising technology giants such as Microsoft, Apple, Google, Amazon, Meta Platform, Netflix, Tesla, and more.

Key Features and Benefits of Investing in NASDAQ

NASDAQ 100 is a market capitalization-weighted index of the top 100 companies in terms of market value, trading on the NASDAQ. Most companies trading on NASDAQ are technology companies and include covers themes sectors such as software, hardware, renewable energy, electric vehicles, and more.

Indian investors can get exposure to NASDAQ stocks by investing in the Indian NASDAQ fund of funds or ETFs. Some of the key features are mentioned below:

1. High growth and innovative large cap companies

NASDAQ 100 comprises innovative and disruptive technology companies. These companies are impacting our daily lives in unprecedented ways and have the potential for high growth.

2. Exposure to new-age economy sectors

The majority of the index comprises disruptive technology sectors like Big Data and AI, robotics, cloud computing, 5G, internet economy, streaming businesses, semiconductors, green economy, smart grid, and more. Many companies among these have filed patents across disruptive technologies. These companies are likely to witness a demand surge, and therefore, growth in business and revenues. 

3. Global Exposure

NASDAQ 100 includes companies having a global business or earning major revenue from countries outside the US. Thus, Indian investors can get truly global exposure and not just access to US companies. Investing in NASDAQ 100 can help investors invest in  companies, which are not present in India.

4. Sector and geographical diversion

Currently, less than 50% of the revenue of companies in NASDAQ 100 is from the US. Thus, investors can be assured of a geographical diversion. Also, though the focus is technology, it targets different sunrise sectors like smart grid and big data. Thus, it offers true diversification for investors.

Why is it a good time to invest in NASDAQ 100?

• NASDAQ 100 comprises cash-rich, less leveraged companies, which are better placed amid rising interest rates. 
• Despite the stressed macroeconomic conditions, these companies have an efficient workforce and considerable pricing power. As a result, they have better control over their revenues.
• The index majorly comprises tech companies, with a healthy mix of hardware, software, and internet businesses, enabling faster innovations than any other industry.
• The investment can serve as a hedge against depreciating INR vs. USD.
• US markets have a low correlation with the Indian market, and so can help diversify your portfolio.
• The world economy is still grappling from events like the pandemic, war, and the subsequent global and financial crises. In 2022, NASDAQ lost around 23%[v] due to the market sell-off. Therefore, current valuations look attractive for investors, making it a good investment opportunity.

Investors can easily access the NASDAQ-100 index by investing in Axis NASDAQ 100 Fund of Fund, which in turns invests in ETFs tracking the NADSAQ 100 TRI.

Mutual fund investments are subject to market risks, read all scheme related documents carefully.

Axis NASDAQ 100 Fund of Fund

(An open ended fund of fund scheme investing in units of ETFs focused on the Nasdaq 100 TRI.)

Investors should consult their financial advisors if in doubt whether the product is suitable for them.