These 3 ASX ETFs, including the BetaShares Nasdaq 100 ETF (ASX: NDQ), have proven popular in 2020. Can that trend continue into 2021?
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Exchange-traded funds (ETFs) have reportedly managed to maintain their popularity in 2020, despite this year being… full of surprises (and volatility) on the share market. There doesn’t appear to be much to indicate this trend won’t continue into 2021.
The 3 ETFs discussed below have all seen record inflows in 2020, and may prove just as popular next year. Here are some reasons why this might be the case:
Vanguard MSCI Index International Shares ETF (ASX: VGS)
This ETF from Vanguard is massive in scope. It holds 1,547 companies within it, which hail from most of the advanced economies of the world. Most of these holdings are from the United States (currently 68.2%), but Japan, The United Kingdom, France, Switzerland and Canada also feature. Its top holdings are mostly recognisable names like Apple Inc (NASDAQ: AAPL), Amazon.com Inc (NASDAQ: AMZN) and Nestle.
VGS has delivered some solid performance numbers, returning an average of 10.63% per annum over the past 5 years, and 12.3% since inception. Clearly, investors can’t get enough of the broad diversification this ETF brings to the table.
BetaShares Nasdaq 100 ETF (ASX: NDQ)
This ETF from BetaShares is a little more concentrated. It holds 100 of the largest companies that list on the American tech-heavy Nasdaq exchange. You’ll also find Apple and Amazon here, as well as Tesla Inc (NASDAQ: TSLA), NVIDIA Corporation (NASDAQ: NVDA) and PayPal Holdings Inc (NASDAQ: PYPL).
Due to a high allocation to the ‘information technology’ sector (47.5%), this ETF is essentially a bet on the future of US tech, a bet that has paid off especially well over the past 10 years. NDQ has returned an average of 21.69% per annum since its inception in 2015, and 34.4% in the past year alone.
BetaShares Asian Technology Tigers ETF (ASX: ASIA)
Another tech-focused fund from BetaShares is our final ETF. ASIA can essentially be looked at as Asia’s answer to the US tech sector. It holds 50 of the largest tech companies in Asia (excluding Japan). According to BetaShares, “Asia is surpassing the West in terms of technological adoption… due to its younger, tech-savvy population”.
And this ETF offers a slice of that action. Its holdings are dominated by Chinese companies with 52.6% of the holdings, but Taiwan, South Korea, Hong Kong and India are also present.
You may or may not have heard of this funds’ top holdings in Samsung Electronics, Taiwan Semiconductor Manufacturing Co, Tencent Holdings, Alibaba Group, Baidu Inc and JD.com Inc. But these are all massive companies with popular products in Asia and abroad. ASIA’s recent performance has been extraordinary. It has returned an average of 32.4% since inception in 2018, including 61.18% over the past year alone.
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John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Sebastian Bowen owns shares of Baidu and Tesla. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and recommends Amazon, Apple, Baidu, NVIDIA, PayPal Holdings, and Tesla. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of BETANASDAQ ETF UNITS and recommends the following options: short January 2022 $1940 calls on Amazon, long January 2022 $1920 calls on Amazon, and long January 2022 $75 calls on PayPal Holdings. The Motley Fool Australia owns shares of and has recommended BetaShares Asia Technology Tigers ETF. The Motley Fool Australia has recommended Amazon, Apple, BETANASDAQ ETF UNITS, NVIDIA, PayPal Holdings, and Vanguard MSCI Index International Shares ETF. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.