Investment
ByArnav Arora
As an Australian finance expert, I have seen many investors become overwhelmed when it comes to deciding between different exchange-traded funds (ETFs). Two popular options for those looking to invest in technology stocks are the iShares Global 100 ETF (IOO) and the BetaShares NASDAQ 100 ETF (NDQ). In this post, I will compare these two ETFs – IOO vs NDQ and offer my insights to help you make an informed decision.
Table of Contents
About IOO and NDQ
- First, let’s take a closer look at each ETF. IOO is an ETF that tracks the performance of the top 100 large-cap global stocks across 11 different sectors, including technology.
- NDQ, on the other hand, tracks the performance of the top 100 non-financial companies listed on the NASDAQ stock exchange, which is primarily made up of technology stocks.
Major Differences
Diversification
One of the main differences between the two ETFs is the geographical diversification of their holdings. IOO is a global ETF, meaning it includes companies from all over the world, while NDQ is focused solely on companies listed on the NASDAQ.
This means that NDQ is heavily weighted towards US tech giants like Apple, Amazon, Microsoft, and Facebook, while IOO includes a broader range of companies from other countries such as Japan’s Toyota, Switzerland’s Nestle, and China’s Tencent.
Fees Associated
Another important factor to consider is the fees associated with each ETF. IOO has an expense ratio of 0.40%, which is relatively low for a global ETF, while NDQ has a slightly higher expense ratio of 0.48%. Over time, these fees can add up and impact your overall returns, so it’s important to keep them in mind when making investment decisions.
Performance
In terms of performance, both IOO and NDQ have delivered impressive returns over the past few years. From 2016 to 2020, IOO returned an average of 10.38% per year, while NDQ returned an average of 25.26% per year over the same period.
However, it’s important to note that past performance does not guarantee future returns, and it’s always important to consider the specific circ*mstances of your own investment portfolio.
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Key Differences between iShares Global 100 ETF (IOO) and BetaShares NASDAQ 100 ETF (NDQ)
Here’s a summary table comparing the key differences between iShares Global 100 ETF (IOO) and BetaShares NASDAQ 100 ETF (NDQ)
| Feature | iShares Global 100 ETF (IOO) | BetaShares NASDAQ 100 ETF (NDQ) |
|---|---|---|
| Geographical Diversification | Includes companies from all over the world | Focused on companies listed on the NASDAQ |
| Holdings | Tracks the top 100 large-cap global stocks | Tracks the top 100 non-financial companies listed on the NASDAQ |
| Expense Ratio | 0.40% | 0.48% |
| Annual Returns (2016-2020) | 10.38% | 25.26% |
IOO Vs NDQ – Which ETF should you choose?
So, which ETF should you choose? Ultimately, it depends on your investment goals and preferences. If you are looking for a globally diversified ETF with exposure to a wide range of large-cap companies across multiple sectors, IOO may be a better fit for you. However, if you’re specifically interested in investing in top-performing technology companies listed on the NASDAQ, NDQ may be a more suitable option. Visit ThinkMoneyTrader for more financial bytes like this.
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Note: It’s always important to do your own research and consult with a financial advisor before making any investment decisions. By carefully considering the differences between these two ETFs and weighing the pros and cons of each, you can make an informed decision that aligns with your investment goals and risk tolerance.
Frequently Asked Questions (FAQs)
Which ETF has performed better over the past five years?
According to historical data, NDQ has outperformed IOO over the past few years. From 2016 to 2020, NDQ delivered an annualized return of 25.26%, while IOO returned an annualized 10.38%.
Which ETF has higher expense ratio?
IOO has a lower expense ratio compared to NDQ. As of March 2021, IOO has an expense ratio of 0.40%, while NDQ’s expense ratio is 0.48%.
Which ETF offers better geographical diversification?
IOO offers a better geographical diversification compared to NDQ, as it includes companies from all over the world. In contrast, NDQ is focused on companies listed on the NASDAQ, which are mostly technology-focused companies based in the United States. This means that IOO offers investors exposure to a broader range of industries and sectors, while NDQ is more concentrated in the tech industry.
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Arnav Arora
CA, CFA and MBA from IIM Indore. I have strong domain knowledge of finance industry and years of experience in trading. Hence, you can trust my reviews and recommendations.
