The Case for the NASDAQ-100 Index
Most Australian investors know that the Australian equity market is top heavy with financial and resources stocks. As a result, if either of these important industries is performing well, there is a decent chance that the Australian equity market will be performing well too. Meanwhile, however, the Australian equity market is under-represented in one of the most vibrant industries in the world – technology. This note provides a case for why Australian investors may wish to diversify their equity exposure into the US tech sector, such as through the NASDAQ-100 index. America’s NASDAQ 100 has strongly outperformed the Australian and US equity markets in recent years, even during the global financial crisis of 2008. Between end-March 2007 and end-April 2015, for example, the NASDAQ 100 (which contains around 63% exposure to tech stocks), lifted by 136% in price terms, compared with only 41% for the US S&P 500 index, and a 6% decline in the Australian S&P/ASX 200 index. The NASDAQ-100 has enjoyed relatively steady trend outperformance against these markets for the past eight years. To read more visit: (VIEW LINK)
Author, columnist, investment strategist and macro-economist. Previous roles at Federal Treasury, OECD, Macquarie Bank and AFR. I develop economic insights and portfolio construction strategies for BetaShares' retail and adviser clients.