How can I invest in Nasdaq in Australia?
Investing in the Nasdaq from Australia these days is relatively simple with many share trading platforms and brokers offering access to US stock markets.
You can get started in 4 main ways:
- Exchange traded funds (ETFs). If you take an ETF approach, you are investing a small amount in every company listed on the exchange based on a set of criteria. For example, you could invest in the Nasdaq 100, which is the 100 largest companies, with more invested in the larger businesses over the smaller ones based on market cap.
- Individual shares. If you only want to gain exposure to certain businesses you can do so by buying individual stocks. When purchasing individual stocks, it's usually best to buy a basket of companies to diversify your risks away from one business.
- Superannuation. In some instances, your superannuation provider will allow you to invest in the Nasdaq. You will simply have to select the option in your account and how much you want to allocate to the index. Your super fund will either actively or passively manage the money on your behalf. Just keep in mind fees and charges when investing in the Nasdaq through super.
- CFDs. You can invest in contracts for difference or CFDs on the futures market. If you choose this approach, you do not own the index or individual shares, but instead are trading based on future prices. Keep in mind CFDs are the riskiest way to gain exposure to the Nasdaq. In most instances, retail investors lose their capital when investing in CFDs, and this approach should really only be used by sophisticated investors.
What even is the Nasdaq?
The National Association of Securities Dealers Automated Quotations (Nasdaq) is the second-largest stock exchange in the world. It's very technology-heavy, being the home to all of the FAANG stocks. As long as you've got a trading account that lets you trade US stocks, you can invest in Nasdaq from Australia.
The Nasdaq has more than 3,300 businesses for investors to choose from, but those looking to track the index will buy the Nasdaq 100, which involves taking a small ownership of the 100 largest companies on the exchange.
Is Nasdaq a good investment?
If you're looking to invest in the US, then the Nasdaq 100 can boast unrivalled performance.
The Nasdaq 100 is heavily weighted towards technology, consumer services and health care, which have seen it outperform the benchmark US S&P 500 11 out of the last 13 years.
Overall, if you invested in the Nasdaq 13 years ago, your returns would be 620% or 16.1 per year, compared with 257% or 10.1% if you invested with the S&P 500.
Both markets have outperformed Australia's ASX 200 over the last decade.
But like any investment, it comes with risk. If you look at 2022, the Nasdaq has been one of the major laggards on the market as investors shy away from technology.
As such, you should ask yourself whether you think the US market, particularly the tech sector, will outperform in the future.
How to get started investing in the Nasdaq
- Choose a broker or trading platform. Different platforms have different fees and account options, so it's important you pick the one that best suits your investing needs. You can compare a range of share trading platforms that let you invest in Nasdaq below.
- Open a share trading account. Once you've selected which broker or platform you'd like to use, you'll need to open an account with a share trading platform or broker to start investing.
- Deposit funds. All brokers will let you deposit in AUD, then will either convert your funds into USD or leave it as AUD. If your funds are left in AUD, it's likely you'll need to pay an FX fee on each trade, which can end up costing more overall.
- Buy Nasdaq shares. Once your account is set up and funded, you can begin buying and selling shares.
Compare Nasdaq share trading platforms
Important: The standard brokerage fee displayed is the trade cost for new customers to purchase $1,000 of either Australian or US shares. Where a platform charges different fees for both US and Australian shares we show the lower of the two. Where both CHESS sponsored and custodian shares are offered, we display the cheapest option.
Disclaimer: General information only. All forms of investments (and in particular, trading CFDs, commodities and forex) carry significant risk, including the risk of losing more than the invested amounts, market volatility and liquidity risks. Past performance is no guarantee of future results. Such activities are not suitable for most investors.
Trading CFDs and forex on leverage is high-risk and you could lose more than your initial investment. It may not be suitable for every investor. Refer to the provider’s PDS and consider the risks before trading.
How much does it cost to invest in Nasdaq?
Some brokers or trading platforms in Australia will charge you a commission on every trade, while others may only charge you an FX fee when you initially deposit AUD and then charge no commission on trades.
It's important that you understand the fee structure of each platform before using it to trade. Certain brokers or platforms will suit different types of investors but may prove to be expensive if you're only investing small amounts.
If you're investing via an index fund, you should also look at what the fund's management fees are. In Australia, these are typically known as MER fees.
Which stocks are on Nasdaq?
There are over 3,300 stocks available on Nasdaq, including many of the largest companies in the world by market capitalisation.
Popular Nasdaq stocks include the following:
- Alphabet (GOOG)
- Amazon (AMZN)
- Apple (AAPL)
- eBay (EBAY)
- Facebook (FB)
- Microsoft (MSFT)
- Netflix (NFLX)
- Tesla (TSLA)
The Nasdaq Composite (IXIC) is a stock market index that tracks the common stocks and securities on the Nasdaq. The Nasdaq 100 is an index that tracks a subset of the top 100 non-financial stocks on Nasdaq. You can invest in these indices by buying an ETF that specifically tracks the performance of the stocks in the index.
Nasdaq trading hours
Nasdaq is open during regular US market hours, which are 9:30am to 4pm ET, Monday to Friday.
There's also after-hours trading, which will impact share prices on the opening.
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. This information is general in nature and is no substitute for professional advice. It does not take into account your personal situation. This information should not be interpreted as an endorsement of futures, stocks, ETFs, CFDs, options or any specific provider, service or offering. It should not be relied upon as investment advice or construed as providing recommendations of any kind. Futures, stocks, ETFs and options trading involves substantial risk of loss and therefore are not appropriate for most investors. You do not own or have any interest in the underlying asset. Capital is at risk, including the risk of losing more than the amount originally put in, market volatility and liquidity risks. Past performance is no guarantee of future results. Tax on profits may apply. Consider the Product Disclosure Statement and Target Market Determination for the product on the provider's website. Consider your own circumstances, including whether you can afford to take the high risk of losing your money and possess the relevant experience and knowledge. We recommend that you obtain independent advice from a suitably licensed financial advisor before making any trades.