How to invest in the Nasdaq 100 index and why

Nasdaq (National Association of Securities Dealers Automated Quotations) is an American stock exchange. Comprising more than 3,000 companies, Nasdaq is one of the major global marketplaces and is second only to the New York Stock Exchange. It is widely followed by traders, investors, and analysts not just in the U.S but around the world.

The Nasdaq 100 Index is an index that tracks the performance of the top 100 non-financial companies listed on the Nasdaq based on market capitalisation. It includes some of the most well-known technology giants such as Alphabet, Amazon, Apple, Meta, Microsoft, Tesla, Netflix, and more. Thus, for Indian investors, investing in the Nasdaq-100 index can be a wise decision to diversify their portfolios and gain exposure to a larger, more competitive market.

On that note, here is a detailed look at different methods to invest in Nasdaq-100 and the benefits that come with such an investment.

How to invest in a Nasdaq fund? 

Indian investors can invest in any Nasdaq fund in the following ways:

  • Mutual funds

Mutual funds are one of the simplest ways to participate in the Nasdaq index. Depending on their financial standing, investors can invest in mutual funds offered by Indian Asset Management Companies (AMCs) that track the Nasdaq index. They can choose between making a one-time lump sum investment or a Systematic Investment Plan (SIP). With an SIP, they can set up an automated payment withdrawal from their bank accounts to enable timely investments automatically. Investors can easily install a mutual fund investment app and start investing in Nasdaq funds based on their risk profile and return expectations.

  • Exchange-Traded Funds (ETFs)

For Indian investors, there are also ETFs which track major international indices, including Nasdaq-100. ETFs can then be bought or sold on the stock market like any other stocks directly from domestic or international brokers. 

Why invest in the Nasdaq 100 index?

  • Maximise gains and capitalise on technological advances

The Nasdaq 100 index is a tech-heavy index that provides investors exposure to prominent technology sectors such as Big Data, robotics, cloud computing, 5G technology, and the green economy. Furthermore, many of these companies have filed patents for various innovative technologies that may result in exponential growth in business and revenue due to a demand surge.

  • Global exposure and diversification

Most companies in the Nasdaq 100 have a global presence with a balance between hardware, software, electric vehicles, and tech sectors. So, investing in the Nasdaq 100 gives Indian investors an opportunity to invest in stocks that are not listed on Indian stock exchanges. 

  • High-growth potential with large-cap companies

Investing in the Nasdaq 100 index exposes investors to some of the most innovative and disruptive companies on the market. These large-cap companies can offer unparalleled potential for growth, enabling investors to capitalise on emerging markets and the latest trends. 

Investing in the Nasdaq 100 Index can be a strategic opportunity to gain exposure to global stocks that could redefine their respective industries. The easiest way for Indian investors to invest in Nasdaq 100 is through ETFs and mutual funds. Investors can do this directly through the AMC or through a domestic or international broker. However, it is essential to research a reliable broker and ensure they have a good track record to maximise the investment’s value.

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