If one is investing in ASX shares, one’s goals will likely vary widely depending on one’s age. For those who are about to retire, or perhaps have already hung up the proverbial boots, it’s highly likely that passive income and cash flow from your investments are the primary objective. However, for those who are still working, or have just started out on their investing journey, building wealth as fast as possible is probably more important. This distinction is vital when selecting ASX shares or exchange-traded funds (ETFs) for one’s investment portfolio.
With that in mind, today, let’s discuss two ASX ETFs that I think are perfect for investors under 40, or anyone who wishes to harness the power of compounding to grow their wealth as fast as possible.
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2 ASX ETFs primed for wealth creation under 40
BetaShares Nasdaq 100 ETF (ASX: NDQ)
First up, we have this US-based index fund from BetaShares. The BetaShares Nasdaq 100 ETF tracks the largest non-financial shares that call the NASDAQ stock exchange home.
The NASDAQ is one of the two major exchanges that serve the United States. Unlike its more mature stablemate, the New York Stock Exchange, the NASDAQ is where many of the newer, tech-focused stocks are listed. As such, you won’t find the old stalwarts of the US markets, such as Coca-Cola or Exxon Mobil, in this fund. Instead, its top echelons are dominated by the likes of Apple, Microsoft, NVIDIA, Amazon, Alphabet, and Tesla. In addition, NDQ houses many other exciting names in the tech space. These range from Palantir, Shopify, and Advanced Micro Devices, to Netflix, PayPal, and SpaceX.
Given this heavy tilt towards some of the fastest-growing, future-facing companies in the world, I think this ASX ETF would be a great choice for anyone under 40 looking to build wealth as quickly as possible over the coming decade (or decades). If NDQ manages to retain the blistering 20%-plus annual returns it has hit over the past decade (no guarantees, of course), that won’t be difficult.
BetaShares S&P/ASX Australian Technology ETF (ASX: ATEC)
Next up, we have another BetaShares fund in the Australian Technology ETF. This ASX ETF is a thematic one, giving investors exposure to the best tech stocks that the ASX has to offer. Our local market has a long and proud history of delivering meaningful returns. However, investing in a broad ASX index fund may not appeal to many investors under 40. That’s because our markets are famously (or perhaps infamously) dominated by large, mature, and slow-growing banks and miners. These shares can be wonderful for those seeking high dividend income. But many investors who want to build wealth at a fast rate are looking for a little more vigour.
That’s where ATEC comes in. This fund lists some of the ASX’s most exciting growth stocks. These include Xero Ltd (ASX: XRO), TechnologyOne Ltd (ASX: TNE), Pro Medicus Ltd (ASX: PME), WiseTech Global Ltd (ASX: WTC), and NextDC Ltd (ASX: NXT), amongst many others.
Tech stocks can be volatile, and this ASX ETF has had a horrid 12 months or so. That said, this could be a great time to pick up some units of this ASX ETF for any investor who is bullish on Australian tech and the companies at its forefront.