Rolle im Portfolio
The iShares NASDAQ 100 ETF provides exposure to the largest non-financial companies listed on the Nasdaq Stock Market. The NASDAQ 100 Index is commonly known as “the” US technology benchmark because of its high concentration in the IT sector – 55-60% weighting as we write. The IT sector consists of companies deriving their revenue from manufacturing and offering hardware, software, semiconductors, communication equipment and services. Historically, technology companies have exhibited higher volatility than the broader market due to the dynamic nature of their business.
This ETF is suitable as a core US equities holding in a globally diversified portfolio. However, investors should be aware that the portfolio is top heavy, with around 20-22% of the weight invested in Apple and Microsoft. Other prominent names include Facebook, Google, Intel and Cisco. As such, the ETF can be used to tilt a portfolio’s equity exposure to technology companies. By the same token, this fund can be deployed by investors looking to avoid exposure to financial stocks.
Compared to the S&P 500, the NASDAQ 100 index has outperformed in 3-, 5- and 10-year periods by 5%, 5.6% and 5% respectively on a total return basis, albeit at the price of higher volatility. On a risk-adjusted basis, however, the picture is not so clear-cut, with comparative performance at 3- and 5- years broadly at par. Looking at the 10-year period, which encompasses the 2008 crisis, the NASDAQ 100 shows superior performance due to fact it did not hold any financial stocks.
This ETF does not distribute dividends, and therefore it is not suitable for income-seeking investors.
Fundamentale Analyse
On the back of a sustained economic recovery, ultra-low interest rates and the IT sector’s strong performance, the NASDAQ 100 outperformed the S&P 500 by 5.6% on an annualized basis in the five years to end June 2015. Since the beginning of 2015, however, the US equity momentum appears to be slowing, with a mix of domestic (e.g. unfavourable weather in Q1, decreasing investment in the energy sector, the West Coast port strike) and international factors (e.g. Greek debt saga) weighing on performance. All these developments, however, have not threatened the US economy long-term growth potential.
The fundamentals underpinning healthy output growth into 2016 remain in place. Job growth continues to be strong – the unemployment rate stands at 5.5% as of this writing - and real disposable personal income is growing at 3% year-on-year. Near-zero short-term rates, compressed credit premiums and rising equity markets provide accommodative financial conditions for consumers and corporates. Cheaper oil prices have been growth-supportive. To cap it all, rising capacity utilization rates – already at pre-crisis levels - hint that there is sufficient demand to justify capital investment by a US corporate sector with higher-than-average cash holdings.
The US technology sectors represent approximately 85% of the world’s IT market capitalisation, according to MSCI. Their growth is driven by both demands for new technologies, such as flexible displays, cloud computing and artificial intelligence, as well as technology staples such as computers, software, smartphones and network solutions.
The US equity market’s P/E ratio is already around its historical median. However, US corporate fundamentals support further growth, not least as earnings growth is running 20% higher than in previous bull cycles.
US interest rates, held at 0.25% since December 2008, are expected to start rising in late 2015. The negative effect on the equity market from entering a tightening cycle tends to be short-lived. Besides, the pace of tightening is likely to be very gradual as inflation is not a pressing issue. In fact, US Fed Chairman Yellen has repeatedly stressed that financial conditions will remain accommodative even after the initial rate rise.
Indexkonstruktion
The NASDAQ 100 notional net return index provides equity exposure to the 100 largest non-financial securities listed on the Nasdaq Stock Market. It is a market capitalisation weighted index representing major industry groups, like computer hardware and software, telecommunications, retail/wholesale trade and biotechnology. The index is heavily biased towards the technology sector (55-60%), followed by consumer discretionary (20-25%) and health care (10-15%). The largest index constituent is Apple, representing 12-15% of the index’s value, followed by Microsoft (8-10%) and Google (3-5%). The index is therefore heavily top weighted as the top 10 holdings represent over 50% of its market capitalisation.
Fondskonstruktion
The fund uses full replication to track its reference index. The ETF invests in all constituents of the index at the same weight as stipulated by the index. iShares engages in securities lending and can lend up to 100% of the securities within its fund to improve its performance. The gross revenue generated from this activity is split 62.5/37.5 between the fund and the lending agent BlackRock, whereby BlackRock covers the costs the costs involved. The fund lent out 0.95% on average in the 12 months to end March 2015. To protect the find from a borrower’s default, BlackRock takes collateral greater than the loan value. Collateral levels vary between 102.5% and 112% of the value of securities on loan, depending on the assets provided by the borrower as collateral. Additional counterparty risk mitigation measures include borrower default indemnification. Specifically, BlackRock commits to replace the securities that a borrower would fail to return. The indemnification agreement is subject to changes, and in some cases without notice. For cash and dividend management purposes, the fund uses futures, thus limiting tracking error.
Gebühren
The fund levies a total expense ratio (TER) of 0.33%, which is the most expensive ETF tracking the NASDAQ 100. Other potential costs associated with holding this fund which are not included in the TER include rebalancing costs, bid-ask spreads and brokerage fees.
Alternativen
Providers offering ETFs tracking the NASDAQ 100 Index include Powershares, Lyxor, Amundi and ComStage. The funds are priced in a 0.23-0.33% range, with the cheapest one being the swap-based Lyxor ETF. Income-seeking investors have a wide choice as well, excluding the accumulation-only ComStage (synthetic; 0.25%) product.
Investors seeking broader US equity exposure (i.e. including financials) should look at the large array of ETFs tracking indices such as the S&P 500 or MSCI USA.
