# NDQ.AX vs QQQ when USD is strong



## brettstrading (3 April 2020)

I was wondering if anyone could educate me, with the USD being so strong against the AUD currently, does it make a difference if I buy NDQ.AX or QQQ? I mean, is my AUD capital going just as far when purchasing each ETF? 

I currently only trade international shares, have allocations in QQQ, VGT, IHI, SOXX and a few individual companies. Following the recent coronavirus decline I am preparing to add to my position but with the USD soaring I've realised I have no idea what to do as my AUD capital is becoming very weak. 

Also, yes I understand these ETF's have many overlapping holdings, I am happy with the overall allocation.


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## InsvestoBoy (3 April 2020)

From an underlying fund perspective they are identical. If you have $1000 AUD and buy NDQ on the ASX or transfer the $1000 AUD to your international broker and sell your AUD for USD then buy QQQ, you will have the same result and exposure.

That said, NDQ is a ripoff with a fee of 0.48% while QQQ is only 0.2%. Sticking with QQQ will also stop you from buying/selling outside NASDAQ market hours where spreads will be wider.

If you have access to international markets already via a good international broker like Interactive Brokers, keep buying your international exposure there, aside from a handful of international ETFs, you will get ripped off buying your exposure on the ASX.


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## Flarierza (12 July 2020)

Hello,
If buying from Australia, is buying NDQ cheaper in the long run despite the management fees?

The broker platforms that I’m aware of charge 0.6% to convert AUD to USD, then you can make the trade using USD.

Because of this extra conversion fee, buying NDQ works out to be cheaper I think? Unless there is a way to fund the account with USD with no/lower conversion fees?

How do you guys convert your AUD/USD?


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## cutz (12 July 2020)

Flarierza said:


> Hello,
> If buying from Australia, is buying NDQ cheaper in the long run despite the management fees?
> 
> The broker platforms that I’m aware of charge 0.6% to convert AUD to USD, then you can make the trade using USD.
> ...




Hi,

I use Interactive Brokers, conversion fees are negligible.


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## Flarierza (14 July 2020)

cutz said:


> Hi,
> 
> I use Interactive Brokers, conversion fees are negligible.




What is the interactive broker conversion fees? I haven't used them and I'm having trouble finding that information on their website.


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## cutz (15 July 2020)

Flarierza said:


> What is the interactive broker conversion fees? I haven't used them and I'm having trouble finding that information on their website.




Hi,

Info is here https://www.interactivebrokers.com/en/index.php?f=1590&p=fx

To work it out, face value in AUD X 0.00002

So for example if converting $10,000 Aussie ... 10000 X 0.00002 = 20cents commission.

Something like that, its not much, last time I placed a NYSE trade I only had AUD in my account, when I purchased the US stock the system did an auto currency conversion, basically it's an FX trade.


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## Flarierza (15 July 2020)

cutz said:


> Hi,
> 
> Info is here https://www.interactivebrokers.com/en/index.php?f=1590&p=fx
> 
> ...




Thanks. Just read through all their pricing information. Looks really good and probably the cheapest I've seen!

I noticed it says minimum $2 USD per order to convert. So I'm guessing that means we only get the "0.00002 x amount" rate if converting more than $100,000 worth at a time.

Plus the additional 0.005 USD per share for each order. This also has a minimum of $1 USD per order.

If I was to use it, I'd probably be buying 2k AUD worth a month, so I would pay the minimum $2 USD per order for the conversion + the minimum $1 AUD per order. Comes to a total of $3 AUD for the order. Then I need to pay the inactivity fee every month, which is ($10 USD - $x spent on commission).

I think it still works out to be pretty cheap. I might give it a go.


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## cutz (15 July 2020)

Flarierza said:


> Thanks. Just read through all their pricing information. Looks really good and probably the cheapest I've seen!
> 
> I noticed it says minimum $2 USD per order to convert. So I'm guessing that means we only get the "0.00002 x amount" rate if converting more than $100,000 worth at a time.
> 
> Plus the additional 0.005 USD per share for each order. This also has a minimum of $1 USD per order.




Hi,

You're reading it incorrectly, note 2 explains it.

The FX order face value ( not commission ) minimum is $2.00 USD on the first tier.

So to be more accurate, the commission is booked up on the USD trade value then converted and charged in aussie, so a $10000 USD trade will cost 29cents AUD to do the conversion at the exchange rate of 0.69.

This is all assuming your account base currency is AUD.


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## Flarierza (15 July 2020)

cutz said:


> Hi,
> 
> You're reading it incorrectly, note 2 explains it.
> 
> ...




Thanks for clarifying. That is even cheaper! Awesome.


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## cutz (15 July 2020)

Flarierza said:


> Thanks for clarifying. That is even cheaper! Awesome.




Anytime mate, these are tough times so it pays to seek out the best deal.


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