Global X: The home for Nasdaq exposure in Canada

This article was produced in partnership with Global X.

Canadians have had a long love affair with tech stocks. In years past, investors could look to domestically listed companies for a portfolio allocation. However, those opportunities are becoming harder to spot.

Technology represents less than 10% of Canada’s S&P/TSX 60 Index – small in comparison to the country’s Financials and Energy sectors, which combined, represent approximately 50% of the index.

Meanwhile, in the U.S., the marquee Nasdaq-100 Index® – the 100 biggest companies listed with Nasdaq – has a market capitalization that is approximately 60% technology companies.

There are more than 40 technology names in the Nasdaq-100 Index®, compared to just four in Canada’s major benchmark.

“Canada has produced homegrown successes like Shopify but we don’t have the same depth and diversity in technology names that are available in the United States. We still love tech and want to get exposure, but to access the opportunity meaningfully, you have to look to the U.S. and the Nasdaq”, explains Chris McHaney, Executive Vice President and Head of Investment Management and Strategy at Global X.

This spring, two new ways for Canadian investors to access the Nasdaq emerged, bringing the number of differentiated Nasdaq-focused ETF strategies from Global X to seven (nine if you count two U.S. Dollar-denominated versions).

This suite of ETFs, McHaney notes, is the “most diversified shelf of Nasdaq exposure” available in Canada.

For long-term growth investors, there’s the Global X Nasdaq-100 Index ETF (QQQX), as well as its U.S. Dollar-denominated version (QQQX.U), which launched May 15th.

More aggressive investors may opt for the Global X Enhanced Nasdaq-100 Index ETF (QQQL), which uses 25% leverage with the aim of boosting returns. QQQL was launched May 22nd.

For Canadians who like the Nasdaq but are seeking an approach that generates more income than the traditionally dividend-barren tech sector, there’s the Global X Nasdaq-100 Covered Call ETF (QQCC).

“A lot of technology names aren’t dividend payers. So, we have to find new and creative ways to generate income for investors”, notes McHaney.

"QQCC writes call options on up to 50% of its holdings, with the other 50% fully exposed to upside in the Nasdaq-100 Index®. With this strategy, investors can receive regular income, as well as exposure to growth-focused tech stocks.”

Global X also offers several options for day traders too, through its BetaPro suite: Canada’s only family of leveraged, inverse, and inverse leveraged ETFs. The BetaPro Nasdaq-100® 2x Daily Bull ETF (HQU) seeks daily investment results, before fees and expenses, equal to 200% of the performance of the Nasdaq-100 Index®. Meanwhile, the BetaPro Nasdaq-100® 2x Daily Bear ETF (HQD) offers a similarly leveraged bearish play.

The ability to customize exposure is an essential element of modern investing. An ETF that suits one person may not suit another.

But as McHaney points out, our own needs evolve over time.

"Investors tend to be primarily focussed on growth early in the investment lifecycle. As investors move closer to retirement, growth typically becomes less of a focus, and income takes over as a primary objective. The amount of growth, the amount of income is different for every investor, and each person may need different solutions to get there. A lot of that can be found in technology related stocks."

And no matter your age or stage, there’s probably a Global X Nasdaq ETF that’s right for you.

For more information on Global X Investments Canada Inc. and its suite of ETFs, visit www.globalx.ca.

Global X Investments Canada Inc. was named as one of the Best Wealth Management Firms to Work for in Canada. Read the full report here.

_{Commissions, management fees, and expenses all may be associated with an investment in products (the “Global X Funds”) managed by Global X Investments Canada Inc. The Global X Funds are not guaranteed, their values change frequently and past performance may not be repeated. Certain Global X Funds may have exposure to leveraged investment techniques that magnify gains and losses which may result in greater volatility in value and could be subject to aggressive investment risk and price volatility risk. Such risks are described in the prospectus. The prospectus contains important detailed information about the Global X Funds. Please read the relevant prospectus before investing.}

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