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Nasdaq Hits 9,000: ETFs to Tap

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Thanks to the broader market rally, the tech-heavy Nasdaq Composite Index topped the major milestone of 9,000 for the first time in Thursday’s trading session. This represents the index’s longest winning streak since July 2013. The benchmark has been up about 36% so far this year, putting it on track to make 2019 its best year since 2013 (read: Wall Street to See Best Year Since 2013: Will ETF Rally Last?).

The index has been mainly powered by the soaring technology sector. The phase-one trade deal as well as solid data from China acted as a boon for tech stocks. This is because technology companies have huge exposure to China. Additionally, the rapid emergence of cutting-edge technology, including cloud computing, big data, Internet of Things, wearables, VR headsets, drones, virtual reality, artificial intelligence and machine learning has been driving the sector. The growing adoption of 5G technology — the next wireless revolution — is creating further opportunities. The wave of mergers and acquisitions is also providing further impetus to this space (read: 5 Solid Tech ETFs to Buy for Christmas).

The latest bouts of data, including jobs, housing and industrial, also boosted investors’ confidence in the economy and the stock market.  

Further, healthcare and consumer discretionary stocks have also provided a significant boost to Nasdaq. A defensive tilt in uncertain times has raised the appeal of healthcare stocks, while an improving economy, along with record holiday season and higher consumer spending, is propelling discretionary stocks higher.

Investors seeking to ride the Nasdaq bulls could consider the following ETFs. These funds might see smooth trading and massive trading volumes in the days ahead if the trend persists.

Invesco QQQ QQQ

This ETF provides exposure to 103 largest domestic and international non-financial companies listed on the Nasdaq by tracking the Nasdaq 100 Index. QQQ is one of the largest and most popular ETFs in the large-cap space, with AUM of $87.6 billion and average daily volume of around 25.4 million shares. It charges investors 20 bps in annual fees and has risen 39.7%, so far this year. The fund sports a Zacks ETF Rank #1 (Strong Buy), with a Medium risk outlook (read: A Bunch of Top-Ranked ETFs That Crushed the Market in 2019).

First Trust NASDAQ-100 Equal Weighted Index Fund QQEW
Holding 104 stocks, this fund provides equal exposure to stocks of the Nasdaq-100 Index. It has amassed $896.1 million in its asset base, while it trades in lower volumes of nearly 67,000 shares a day on average. It charges 60 bps in annual fees and has gained 36.5% in the year-to-date period. QQEW also carries a Zacks ETF Rank #3 (Hold) with a Medium risk outlook.

Fidelity Nasdaq Composite Index Tracking Stock ONEQ

This ETF tracks the Nasdaq Composite Index, holding a broad basket of 992 stocks. It has AUM of $2.3 billion and average daily volume of around 33,000 shares. The expense ratio comes in at 0.21%. The product has gained 37.8% in the year-to-date frame and carries a Zacks ETF Rank #2, with a Medium risk outlook.

ProShares Ultra QQQ QLD

Investors seeking to make big gains in a short span can bet on QLD. It provides twice the return of the NASDAQ-100 Index’s daily performance and exchanges more than a million shares in hand on average. The fund has an AUM of $2.3 billion, and charges 95 bps in fees and expenses. It has surged 83.8% so far this year.

ProShares UltraPro QQQ (TQQQ - Free Report)

For a more bullish approach, TQQQ could be an excellent choice. It also tracks the NASDAQ-100 Index but offers thrice the returns of the daily performance, with the same expense ratio of QLD. The fund has managed an AUM of $4.2 billion and sees nearly 16 million more in average daily volume. TQQ had returned nearly 138% in the year-to-date period (read: A Quick Guide to 10 Most Popular Leveraged ETFs).

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