The Betashares Nasdaq 100 ETF (ASX: NDQ) has dropped over 10% since 19 February 2025. This could be the right time to invest for brave investors.
This exchange-traded fund (ETF) has been an excellent investment for many years, but it’s hit a bump in the road in the last several weeks.
Investors have been worried about what US President Trump is going to do with tariffs and what negative flow-on effects that could have on business profits.
But, at this lower valuation, I think it’s a good time to jump on the NDQ ETF for a few reasons.
Great businesses at better prices
The NDQ ETF is invested in 100 of the largest non-financial businesses on the NASDAQ (a stock exchange in the US).
That means being able to invest in companies like Apple, Microsoft, Nvidia, Amazon, Alphabet, Broadcom, Meta Platforms, Costco, Netflix and Tesla.
ETF returns just reflect the performance of the underlying companies. Collectively, the businesses in the portfolio have suffered a sell-off and have largely undone the gains after the US election.
With how profits at these large businesses continue growing, that means the companies are clearly cheaper with a lower price/earnings (P/E) ratio.
I think buying these companies is wise because they are typically the ones that have introduced new products or services to society, leading to new ways of making money.
Shorter-term problems?
Investors are worried about what’s going on with the US, but the world has shown how it has been able to move on from previous issues in the past such as the GFC, the COVID pandemic and elevated inflation.
It’s hard to know what the eventual tariff landscape will look like after the implementations and negotiations between countries, but I don’t think it will mean the end of capital gains.
I don’t think investors are going to be worried about tariff impacts forever. I think this could be an opportunity to invest today.
The NDQ ETF is a good option for diversification
Aussies focused on the domestic economy may be overexposed to banking, mining or real estate.
Investing in the NDQ ETF means getting exposure to technology and consumer brands/stocks that Aussies don’t have the same exposure to on the ASX.
I think it’s a good idea to increase exposure to global businesses that still have big plans for growth. Doing so at this lower valuation makes a lot of sense to me.
