The Best NASDAQ ETFs to Buy in Canada for February 2025



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        Key takeaways

        NASDAQ-100 Exposure in Canada – Canadian investors have multiple options to access the NASDAQ-100, including hedged and unhedged ETFs.

        Hedging vs. Non-Hedging – Some ETFs hedge against currency fluctuations, while others offer direct USD exposure.

        Covered Calls for Income – The Horizons NASDAQ-100 Covered Call ETF (QQCC) provides a unique income-generating alternative for investors seeking yield.

        One ETF I like way better than the ones on this list.

        As Canadian investors, we can’t get drawn into home-country bias and invest most of our portfolio into Canadian equities on the TSX.

        Why? The Canadian economy is not large enough and is exposed to too many cyclical industries such as oil and gas, mining, and financials.

        If we want a properly diversified portfolio, we need exposure to the United States, one of the fastest-growing economies in the world and a global superpower.

        However, many Canadians don’t want to own US stocks directly as they’d rather keep their currency in Canadian dollars. So, many look to Canadian exchange-traded funds to get the job done when it comes to owning the S&P 500 or the NASDAQ.

        How to invest in the Nasdaq from Canada?

        There are three main ways to invest in the NASDAQ in Canada.

        • Buy Canadian-listed NASDAQ index funds
        • Exchange your currency and buy US-listed NASDAQ index funds
        • Invest in the individual stocks on the NASDAQ to gain smaller exposure

        In this article, I’ll be going over the first option, which covers some of the best Canadian NASDAQ ETFs to be looking at today. Although they’re certainly not as defensive as a Canadian HISA ETF, these NASDAQ ETFs, for the most part, are not as volatile as people make the NASDAQ out to be.

        CAD-hedged NASDAQ-100 exposure

        BMO NASDAQ-100 Equity CAD-Hedged ETF (TSE:ZQQ)

        ZQQ provides Canadian investors with access to the NASDAQ-100 while hedging against currency fluctuations. This ETF is ideal for those who want exposure to top U.S. tech stocks without worrying about CAD/USD exchange rate movements.

        • Currency-hedged U.S. tech exposure – Protects against fluctuations in the Canadian dollar.
        • Diversification across major growth sectors – Holds giants like Apple, Microsoft, and NVIDIA.
        • Strong long-term performance – The NASDAQ-100 has historically outperformed many global indices.
        • Efficient way to track tech trends – Offers access to AI, cloud computing, and e-commerce leaders.
        • Canadian dollar fluctuations – Currency hedging helps mitigate forex risks.
        • Tech sector earnings – High-growth companies dominate the index.
        • Interest rates impact on tech – Higher rates may pressure valuations.
        • Underperformance if CAD weakens – If the Canadian dollar drops, a hedged ETF may lag unhedged alternatives.
        • Tech sector volatility – High-growth stocks can experience sharp corrections.
        • Limited exposure to value stocks – Primarily focused on high-growth companies.

        Unhedged access to the NASDAQ-100

        BMO NASDAQ 100 Equity ETF (TSE:ZNQ, ZNQ.U)

        ZNQ provides exposure to the NASDAQ-100 without currency hedging, allowing investors to benefit from USD strength. The ZNQ.U version trades in U.S. dollars for those who prefer direct USD exposure.

        • Direct NASDAQ-100 exposure – Tracks 100 of the largest U.S. non-financial companies.
        • Unhedged for long-term currency gains – Beneficial if the U.S. dollar strengthens.
        • Lower cost compared to some competitors – Competitive expense ratio enhances returns.
        • Liquidity with a USD trading option – ZNQ.U provides direct USD access.
        • USD strength vs. CAD – The unhedged version benefits from USD appreciation.
        • Tech innovation cycle – AI, semiconductors, and cloud computing drive growth.
        • Market momentum vs. corrections – Tech stocks experience high volatility.
        • Currency risk – If the CAD strengthens, returns may be reduced.
        • Tech sector overconcentration – Heavy allocation to top tech names.
        • Potential overvaluation – Some NASDAQ stocks trade at high P/E ratios.

        CAD-hedged alternative from iShares

        iShares NASDAQ 100 Index ETF CAD-Hedged (TSE:XQQ)

        XQQ provides the same exposure as ZQQ but from iShares, a leading global ETF provider. It offers a hedged version of the NASDAQ-100 for Canadian investors seeking protection from currency fluctuations.

        • Hedged NASDAQ-100 exposure – Mitigates currency risk.
        • Managed by iShares (BlackRock) – One of the most reputable ETF issuers.
        • Strong liquidity and trading volume – Easily accessible for investors.
        • Direct exposure to U.S. tech giants – Focused on long-term capital growth.
        • Hedging impact on returns – CAD strength or weakness influences ETF performance.
        • Sector-specific risks in tech – Regulatory changes may impact major holdings.
        • Monetary policy effects – Interest rate hikes can impact growth stocks.
        • Hedging costs over time – Can slightly impact total returns.
        • Tech-heavy allocation – Limited diversification outside tech and consumer sectors.
        • Potential overvaluation – High P/E ratios may pose correction risks.

        Tax-efficient, swap-based ETF

        Horizons NASDAQ-100 ETF (TSE:HXQ)

        HXQ offers exposure to the NASDAQ-100 through a total return swap structure, potentially enhancing tax efficiency for non-registered accounts. It does not distribute dividends but reinvests returns, making it attractive for long-term investors.

        • Tax-efficient structure – No distributions, making it ideal for non-registered accounts.
        • Low tracking error – Efficiently mirrors NASDAQ-100 performance.
        • Unhedged for full U.S. dollar exposure – No currency hedging costs.
        • Good alternative for high-income investors – No taxable distributions to worry about.
        • Tax law changes in Canada – Future regulations may affect swap-based ETFs.
        • Tech sector volatility – NASDAQ-100 remains a high-risk, high-reward index.
        • Interest rate cycles – Tech valuations are sensitive to rate hikes.
        • Regulatory uncertainty – Swap-based ETFs may face tax law changes.
        • Liquidity concerns – Swap-based structures can have lower liquidity.
        • No dividend payouts – Investors seeking income may prefer alternatives.

        Invesco’s NASDAQ-100 tracker

        Invesco NASDAQ 100 ETF (TSE:QQC)

        QQC offers straightforward exposure to the NASDAQ-100, competing with ZNQ and HXQ. It provides an unhedged, cost-effective way to track the index.

        • Direct NASDAQ-100 exposure – Tracks the 100 largest non-financial U.S. stocks.
        • Low cost compared to peers – Competitive fees for a NASDAQ-tracking ETF.
        • Unhedged for currency appreciation – Investors benefit from USD strength.
        • Established ETF issuer – Backed by Invesco, a well-known asset manager.
        • Tech industry growth – AI, fintech, and cloud computing lead the way.
        • Currency trends – USD appreciation benefits unhedged investors.
        • Market concentration risks – Heavy reliance on top tech firms.
        • Exposure to high-volatility stocks – Tech stocks can swing dramatically.
        • Currency risk – Unhedged ETFs are vulnerable to CAD strengthening.
        • Competition from similar ETFs – Other NASDAQ-100 ETFs may have lower fees.

        Global X Investments Canada Inc

        Bonus: Horizons NASDAQ-100 Covered Call ETF (TSE:QQCC)

        QQCC uses a covered call strategy to generate income while still providing exposure to the NASDAQ-100. This ETF is suitable for income-focused investors who want to mitigate some of the volatility of the tech sector.

        • Enhanced income potential – Covered calls generate premium income.
        • Lower volatility compared to pure NASDAQ-100 ETFs – Options strategy cushions downside risk.
        • Good for conservative tech investors – Balances growth with income.
        • Still offers tech sector upside – Exposure to top NASDAQ names.
        • Income generation in a volatile market – Covered calls perform well in choppy conditions.
        • Tech earnings reports – Strong results can boost premiums.
        • Capped upside – Covered calls limit potential gains.
        • Dividend taxation – Income from options premiums may be taxed differently.

        Can a Canadian still buy QQQ?

        Absolutely. Nothing says you cannot convert your currency to USD and instead own QQQ, an ETF that tracks the NASDAQ-100 Index.

        However, there are some CAD-listed ETFs that we went over in this article that will give you exposure to the NASDAQ-100 without having to exchange currencies.

        Is there an ETF that tracks the entire NASDAQ?

        The Fidelity NASDAQ Composite ETF is a great way to gain exposure to the entire NASDAQ Index. But keep in mind that no ETF providers here in Canada offer one. The Fidelity fund, which trackers under the ticker symbol ONEQ, is in USD.

        Historically, the NASDAQ-100 has been the much more popular route as it contains most of the blue-chip technology stocks in North America. However, ONEQ is undoubtedly a strong alternative if you want exposure to the smaller-cap companies on the index.

        The tax implications of these ETFs

        It is essential to understand that holding Canadian-listed ETFs that contain holdings of US stocks or ETFs directly may be subject to withholding taxes on the dividends, even inside of an RRSP. This, in addition to brokerage commissions to buy and sell them, certainly eat into returns.

        Although the NASDAQ-100 is not known for its high-income levels, there are still some situations where taxable income will be generated via a distribution. So, it’s crucial to determine your income taxes and tax situation before buying any of them.

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