Investment in Focus: Buying US Tech Stocks Listed in the ASX
Technology is everywhere and it’s obvious how innovations have affected our lives. Look at where Microsoft, Apple, and Facebook has gotten us compared to where the world was 10, 20, or 30 years ago.
Also, look at how big these companies have become in a span of a few years. You could have been richer if you were able to buy shares of these businesses during their early years.
How can you make money out of this continuously booming industry? It’s not too late to get into tech stocks that could define the future and become the next Microsoft or IBM. By investing in US tech stocks that are listed in the Australian Exchange, you can hitch a ride in their success the moment their prices move up.
Investing in US Technology Stocks
Investing in tech companies can have very lucrative rewards when their innovations start to click to the public. From having a value amounting to hundreds of thousands of dollars, many of them are worth billions today. If you’ve invested in Facebook five or six years ago, your money would have quadrupled in value today. With that in mind, you’d want to get invested in similar companies before their prices shoot up.
There are basically three ways to get involved in US tech stocks: an online brokerage platform, a managed fund, and an exchange-traded fund (ETF).
Opening an online account with a brokerage platform enables you to directly trade US tech stocks. This is recommended for experienced traders who know their way around different markets.
For those who don’t have the time or expertise to navigate the market, a managed fund would be the ideal choice. Fund managers will handle your account and pool it with other investors’ money to be able to tap into a broader range of market opportunities.
The last one is by buying ETFs listed in the ASX. They’re more cost effective than a managed fund and they give you better control on which US tech stocks to follow. A single share of an ETF can already give you exposure to a number of top tech companies, providing your portfolio with instant diversity.
Companies like Facebook and Apple may have had their glory days but the show isn’t over for the tech sector as a whole. With that in mind, you’d want to get invested in them before their prices shoot up. Here are ETFs that will give you exposure to the top tech stocks in the US and other countries.
1) BetaShares NASDAQ 100 ETF (ASX:NDQ)
The NDQ ETF was created in 2015 and is based on the NASDAQ-100 index. It provides exposure to tech giants like Apple, Intel, Microsoft, Alphabet (Google), Amazon, Tesla, and Facebook. Although it’s heavily-based on tech stocks, only 53% of them can be considered purely delving in technology development. The rest of the index follows consumer and healthcare services.
The management cost for the NDQ ETF is at 0.48%. Dividends are given biannually. It’s highly liquid with a market cap of around $490 million.
2) ROBO Global Robotics and Automation ETF (ASX:ROBO)
ROBO is designed to follow the performance of companies involved in the robotics, artificial intelligence, and automation industries. Companies included in the index must satisfy the criteria for market capitalisation, average value traded daily, and global recognition. Around 75% of the assets included in this ETF belong to tech companies in the US, Japan, and Germany.
Management cost for the fund currently stands at 0.82%. It provides dividends annually with a yield of 1.69% to date. Its market capitalisation is over $140 million with an average daily trading volume of $1 million.
3) Morningstar Global Technology ETF (ASX:TECH)
TECH was created in 2017 and follows the Morningstar Developed Markets Technology Moat Focus Index which is invested in technology giants like Microsoft and Apple. The Morningstar Index is exposed by as much as 40% in US tech stocks, while the rest tracks other tech companies all around the globe.
The index tracks companies that possess a wide ‘moat’ that gives them the advantage of being able to stave off competitors for a longer time than an organization with little to no moat. This means they can earn higher than average returns on a long-term perspective.
Management costs currently stand at 0.45%. Dividend is given on a biannual basis with an average yield of 4.97%. Its market cap is around $84 million.
4) BetaShares Global Cybersecurity ETF (ASX:HACK)
The cybersecurity industry is a vital component in ensuring technological advancements don’t succumb to fraudulent and illegal activities. Considering its growing importance in the digital age, it’s wise to consider to invest in companies in this sector.
HACK provides exposure to cybersecurity companies like Cisco Systems, VMWare, and Symantec. The ETF tracks the Nasdaq Consumer Technology Association Cybersecurity Index and is invested in over 30 of the largest names in the cybersecurity industry all over the world.
It currently has a market capitalisation of over $140 million. The management cost for this fund is 0.67%. It provides dividend biannually with a yield of 6.10%.
Tech companies are hot – and will always be popular – because they have the potential to shape the future. They can create value and demand that weren’t there, opening opportunities to exponentially grow their business in a short amount of time. This is why it’s best for you to get exposed to US tech stocks since they can provide better chances of growing your wealth faster compared to other market sectors. Thanks to ETFs, you can get instant exposure to a number of these companies by just buying a single share.