How to invest in the NASDAQ 

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Originally published at: https://blog.investengine.com/how-to-invest-in-the-nasdaq/

If you’re interested in tech stocks, the NASDAQ is one of the most popular places to invest. 

Known for its focus on innovation, the NASDAQ includes some of the world’s biggest names in technology, communications, and biotech.

But how do you invest in the NASDAQ from the UK? In this guide, we’ll explain what the NASDAQ is, how to invest in it using ETFs, and how to do it in a cost-effective, tax-efficient way with InvestEngine.

What is the NASDAQ?

The NASDAQ is a major US exchange that’s home to many of the world’s most innovative companies, particularly in tech and growth sectors.

There are a few different NASDAQ indices, but the one most investors mean when they say it is the NASDAQ-100. It tracks 100 of the largest non-financial companies listed on the exchange.

This includes major names like Apple, Amazon, Microsoft, Alphabet, Nvidia, Meta and Tesla (also known as the Magnificent Seven). 

The NASDAQ-100 is often seen as a barometer of the tech sector, and is known for both its growth potential and higher volatility.

Why invest in the NASDAQ?

The NASDAQ offers exposure to:

  • High-growth sectors like cloud computing, AI, e-commerce, and electric vehicles
  • Household names that dominate globally
  • Companies with strong earnings potential and innovation pipelines

Historically, the NASDAQ-100 has delivered strong long-term returns, but it can be more volatile than broader indices like the S&P 500 or FTSE 100. That makes it best suited to long-term investors who can handle short-term ups and downs.

Of course, past performance isn’t a reliable indicator of future returns, but having an idea of the risk level you’re entering into is important. 

How to invest in the NASDAQ from the UK

You can’t invest directly into the NASDAQ. You can, however, invest into an index fund or exchange-traded fund (ETF) that tracks the index. 

1. Choose a NASDAQ ETF

The easiest way to invest in the NASDAQ is through an Exchange-Traded Fund (ETF) that tracks the NASDAQ-100 index.

Some options include:

These ETFs are designed to mirror the performance of the NASDAQ-100. They’re listed in GBP, available to UK investors, and come with relatively low fees.

All of these ETFs are available on InvestEngine with no trading or platform fees for DIY portfolios. ETF costs do apply. 

2. Pick your investment account

Choosing your account type is an important decision for anyone looking to invest. Depending on your goals, you can hold your ETF in:

  • A GIA (General Investment Account) – Flexible, with no limits, though gains and dividends may be taxed above your allowances. Ideal for anyone who has maxed out their ISA allowance already.

Want to invest through your company? Our Business Account also supports NASDAQ ETFs.

We compare ISAs and SIPPs in this article. They do different things but, for a lot of investors, one or both will be sufficient. 

Investing through a tax wrapper like an ISA or SIPP can help you keep more of your returns.

3. Decide how and when to invest

How and when you invest is a personal decision, and it’ll depend on your circumstances and your goals. There are, however, a couple of common methods. 

You can invest:

  • As a lump sum – great for using up tax allowances or investing windfalls
  • Little-and-often – automate your contributions with an InvestEngine Savings Plan.

Watch our video explainer to learn more about how investing regularly compares to investing a lump sum. 

Savings Plans automate weekly, fortnightly or monthly payments from as little as £20. So, you can set up your regular investments then sit back and relax as your portfolio ticks over.

What to watch out for

While the NASDAQ can be a great addition to the portfolio of UK investors, there are a few things to keep in mind:

Currency risk

The underlying shares in NASDAQ ETFs are priced in US dollars. That means that, though the ETF is priced in GBP, your investment is exposed to fluctuations in the GBP/USD exchange rate.

Volatility

The NASDAQ-100 is growth focused, which means it targets higher potential returns. This, however, can come with larger short-term swings. It may not suit all investors, especially if you’re close to needing to access your money.

Sector concentration

The index is heavily weighted towards tech and consumer services. While this offers focused exposure, it also means you’re less diversified than in a global ETF.

To spread risk, investors often consider combining a NASDAQ ETF with other regional or global ETFs, such as S&P 500, FTSE 100, or emerging markets.

Why use InvestEngine to invest in the NASDAQ?

InvestEngine makes it easy to access NASDAQ ETFs. With powerful tools to automate and simplify your investing, it’s the ideal platform for new and experienced investors alike. 

Here’s what you get:

You can open an account in minutes and start building your UK investment portfolio today.

Final thoughts

The NASDAQ-100 gives you access to some of the world’s most dynamic companies — many of which lead the way in tech, biotech and innovation.

With a NASDAQ-tracking ETF, you can invest in these companies easily and cost-effectively from the UK. Just make sure it fits within your broader investment plan — and consider balancing your exposure with other ETFs for greater diversification.

Important information

Capital at risk. The value of your investments may go down as well as up, and you may get back less than you invest. ETF costs apply. 

Tax treatment depends on your personal circumstances and may change in future. This article is for general information only and does not constitute financial advice.