I think we’d need a crystal ball to answer that question, unfortunately! I think the current P/E ratio for the Nasdaq is just under 40 times which is pretty high by historic standards — this chart shows what it was from 2005 to 2020, with 20-30 times being fairly standard. But you could argue today’s tech companies are much higher quality and therefore deserve to be more highly rated.
https://www.plantemoran.com/-/media/images/wealth-management/economic-update-feature-image/2020/august-20/nasdaq-100-chart.jpg?h=493&w=924&hash=218B08BAD85D983B64E81001859BE5E9

https://www.hl.co.uk/shares/shares-search-results/i/invesco-markets-eqq-nasdaq-100-ucits-etf

Glad you liked the article Tech fan ?

I must admit I’m not entirely sure if you can buy QQQ on the main UK platforms. I tried a couple and it seemed to highlight the UK versions rather than the US one.

Assuming you could, the costs might be worth considering. I think the annual expense cost is slighter lower for QQQ (0.2% Vs 0.3%) but the buy/sell transaction cost might be slightly higher given it’s a US listing.

Purely from a personal point of view, I tend to prefer the basic UK listed versions of such things, just to keep things simpler. But that’s just me and everyone has their own view.

Thanks. I certainly wouldn’t claim it as an original thought 🙂 but I was surprised just how few trusts/funds have managed to keep up.

Certainly in the trust world, there aren’t that many that focus on North America, so when the US does so well for so long, it’s a tough comparator.

Tesla seems the most incredible valuation to me, although I think Apple, Alphabet, Microsoft and Facebook are all valued at 35-40 times estimated profits for this year now. Amazon is over 100 times, but just over 40 times based on cash flow I think.

Of the two main tech trusts, I think I’m probably leaning more towards Allianz Tech than Polar at the moment as it makes more of an effort to differentiate itself from the index with bigger stakes in smaller companies. It’s always interesting to hear what Ben Rogoff at Polar has to say though, whereas Walter Price at Allianz is a more subdued presenter.

I touched on the disparity between the UK and US markets a couple of years back
http://diyinvestoruk.blogspot.com/2018/09/uk-v-global-investment-returns.html

The gap has been widening over the past decade and a big reason is the dominance of the big US tech companies. I am concerned about climate issues so do not wish to hold the index but I have added Microsoft, Google and Tesla to my portfolio earlier this year which has boosted returns…Tesla up 50% in just the past month!

I also hold the Polar Capital Tech Trust which gives a broad exposure to the sector. I don’t see the dominance of the big tech companies waning anytime soon but I think they will adapt to increasingly embrace and address the threats posed by climate change.