The Betashares Nasdaq 100 Currency Hedged ETF (ASX: HNDQ) offers Australians exposure to the 100 largest non-financial companies on the Nasdaq — the technology giants at the heart of the artificial-intelligence boom — with the US-dollar currency exposure hedged back into Australian dollars. It is the currency-hedged sibling of Betashares’ popular unhedged Nasdaq 100 fund, and it behaves quite differently when the Australian dollar moves.

In September 2026, with a more hawkish US Federal Reserve and the Australian dollar sensitive to shifting rate expectations, the hedged-versus-unhedged decision is squarely in focus. This article explains how HNDQ works, why the hedging matters, and the catalysts and risks that could shape it from here.

What is the HNDQ ETF?

HNDQ is a passive ETF issued by Betashares. It aims to track the Nasdaq 100 Currency Hedged AUD Index, before fees and expenses — the same 100 large non-financial Nasdaq companies as the standard Nasdaq 100, but with the foreign currency exposure hedged into Australian dollars. In practice, Betashares states that HNDQ obtains its exposure by investing in its unhedged Nasdaq 100 fund and applying a currency hedge on top. The fund charges management costs of around 0.51% per annum and gives Australians access to the world’s leading technology companies with the currency ride largely removed.

The hedging is the defining feature. Because most of the US-dollar exposure is neutralised, HNDQ aims to isolate the underlying Equity return, so movements in the AUD/USD Exchange Rate have limited effect on performance. That is the mirror image of the unhedged fund, which benefits when the Australian dollar weakens and is hurt when it strengthens. In practical terms, the core choice is not "HNDQ or not" but hedged versus unhedged Nasdaq 100 exposure. The underlying holdings remain concentrated in large US technology and growth companies, with the economic exposure overwhelmingly US-based.

What is driving interest now?

The key driver is currency. With the US Federal Reserve holding at 3.50–3.75% in mid-2026 and the RBA at 4.35% with a hold-or-hike bias, the relative path of Australian and US interest rates is a major influence on the AUD/USD exchange rate. Investors who expect the Australian dollar to strengthen — which would erode unhedged US returns — may prefer a hedged fund like HNDQ, while those expecting a weaker Australian dollar may favour the unhedged version.

Beyond currency, HNDQ is fundamentally a Nasdaq 100 fund, driven by the same forces as US big technology: the AI theme, mega-cap technology earnings, and Fed policy. The Nasdaq 100’s long-duration growth profile makes it highly rate-sensitive, so the hawkish Fed is a key consideration. The hedging overlay changes how those returns translate into Australian dollars but not the underlying exposure. That makes HNDQ a tool for managing currency risk rather than a different bet on technology.

Portfolio and holdings

HNDQ’s underlying portfolio is the Nasdaq 100, dominated by the largest US technology and internet companies — names such as Apple, Microsoft, Amazon, Nvidia and Alphabet — with the economic exposure more than 96% US-based. Because it obtains its exposure through the unhedged Nasdaq 100 fund, its holdings profile is effectively the same, concentrated in a handful of technology giants.

The single most important variable that distinguishes HNDQ from the unhedged fund is not stock selection but the currency hedge. Investors are effectively buying the same 100 Nasdaq companies, but choosing to strip out the currency effect. That decision can matter a great deal in years when the Australian dollar moves sharply. The concentration in mega-cap technology means HNDQ shares the unhedged fund’s reward-and-risk profile, minus the currency ride.

Catalysts to watch

Several factors could influence HNDQ in the coming months: the relative path of US and Australian interest rates and its effect on the AUD/USD exchange rate; the pace of AI Capital spending and whether it converts into profits; the Earnings of the largest technology holdings; US Federal Reserve policy and whether a rate hike materialises; and the cost and effectiveness of the currency hedge.

Risks

HNDQ carries the risks of a Nasdaq 100 fund plus those specific to hedging. Technology and single-stock concentration mean a repricing of Growth Stocks could weigh on the fund. Currency-hedging risk means HNDQ will not benefit from a falling Australian dollar and can incur hedging costs and imperfect tracking. Interest-rate risk is elevated, since long-duration growth stocks are sensitive to Fed policy. Valuation risk after strong gains, country concentration in the US, and general market and geopolitical risks all apply. The hedged structure suits investors managing currency risk, but it is not inherently lower risk than the unhedged fund.

Outlook

HNDQ offers Australians a way to own the Nasdaq 100 without the full swing of currency movements. Its near-term appeal hinges on the outlook for the Australian dollar and on whether investors want to hedge that exposure, alongside the fortunes of US big technology. Investors may be watching relative US and Australian rate decisions, technology earnings and the exchange rate for direction. The outlook may depend on the currency’s path as much as on the Nasdaq 100’s returns themselves.