Ride the Impressive Nasdaq Rally With These 5 ETFs

Sweta Jaiswal, FRM
·4-min read

Joe Biden’s swearing in as the 46th president kept investors busy, with the broader indices rallying last week.  The tech-heavy Nasdaq Composite was up nearly 4.2% in the week ending Jan 22. Meanwhile, the S&P 500 and the Dow Jones Industrial Average climbed 1.9% and 0.6%, respectively, in the period.

The Nasdaq Composite index posted its best week since November 2019 and also witnessed its fifth positive week in six weeks, per a CNBC article. It is being observed that strong performances by some major tech players drove the index to an all-time high. Among the prominent players, Apple AAPL rallied 9.4% last week. Going on, Facebook FB and Microsoft FB rose 9.2% and 6.3%, respectively, in the same period.

In this regard, Mark Haefele, chief investment officer at UBS, said that “unlike earlier this month, this week’s rally has been led by growth stocks and mega-cap tech names,” as mentioned in a CNBC article. He also said that Netflix’s NFLX “strong results and plans to return cash to shareholders supported a rally in the other FAAMNGs ahead of their forthcoming earnings releases,” per a CNBC article.

The world's largest video streaming company, Netflix pleased investors with better-than-expected subscriber growth in the fourth quarter of 2020. Netflix added 8.51 million new subscribers globally in the fourth quarter, well ahead of the company’s guidance of 6 million additions. Netflix now has 203.7 million paid subscribers worldwide, up 21.9% year over year. This is the first time that the company topped 200 million streaming subscribers. The upbeat earnings results of this video-streaming company have raised hopes on the upcoming big tech earnings releases this week.

Amid the coronavirus pandemic, technology is playing a pivotal role in our lives. Thus, rising work-from-home and online-shopping trend, increasing digital payments, growing video streaming and soaring video game popularity have become the ‘new normal’. Given the aggravating coronavirus outbreak in the United States, it is believed that products and services from these tech giants will continue to be a major requirement in daily lives.

ETFs to Gain

Investors seeking to ride the Nasdaq bulls could consider the following ETFs. These funds might see massive trading volumes in the days ahead if the afore-mentioned trends stay:

ProShares UltraPro QQQ TQQQ

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, while charging 95 basis points (bps) in expense ratio. The fund has managed AUM of $10.18 billion (read: Nasdaq Hits 13,000 for the First Time: ETFs to Bet On).

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. The fund has AUM of $4.13 billion. It charges 95 bps in fees and expenses (read: 7 Nasdaq ETFs to Play the Index's Winning Momentum).

Invesco QQQ QQQ

This ETF provides exposure to 102 largest domestic and international non-financial companies listed on the Nasdaq and is based on the Nasdaq-100 Index. QQQ is one of the largest and most popular ETFs in the large-cap space, with AUM of $156.09 billion. It charges investors 20 bps in annual fees. The fund sports a Zacks ETF Rank #1 (Strong Buy), with a Medium-risk outlook (read: 6 Best Active ETFs of 2020).

Fidelity Nasdaq Composite Index Tracking Stock ONEQ

This ETF tracks the NASDAQ Composite TR USD, holding a broad basket of 1,017 stocks. It has AUM of $3.77 billion. The expense ratio comes is 0.21%. The product carries a Zacks ETF Rank #1, with a Medium-risk outlook.

First Trust NASDAQ-100 Equal Weighted ETF QQEW

Holding 103 stocks, this fund replicates as closely as possible, before fees and expenses, the price and yield of the NASDAQ-100 Equal Weighted Index. It has amassed $1.25 billion in its asset base and charges 59 bps as fees. QQEW carries a Zacks ETF Rank #1, with a Medium-risk outlook.

Want key ETF info delivered straight to your inbox?

Zacks’ free Fund Newsletter will brief you on top news and analysis, as well as top-performing ETFs, each week. Get it free >>


Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
 
Apple Inc. (AAPL) : Free Stock Analysis Report
 
Netflix, Inc. (NFLX) : Free Stock Analysis Report
 
Invesco QQQ (QQQ): ETF Research Reports
 
Facebook, Inc. (FB) : Free Stock Analysis Report
 
First Trust NASDAQ100 Equal Weighted ETF (QQEW): ETF Research Reports
 
ProShares Ultra QQQ (QLD): ETF Research Reports
 
Fidelity NASDAQ Composite Index Tracking Stock Fund (ONEQ): ETF Research Reports
 
ProShares UltraPro QQQ (TQQQ): ETF Research Reports
 
To read this article on Zacks.com click here.
 
Zacks Investment Research
 
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report