Could the Betashares Nasdaq 100 ETF (ASX: NDQ) be a good opportunity during this correction for both the global share market and the ASX share market?
It has been a volatile time for plenty of shares, both the mega-caps and the smaller ones.
The Betashares Nasdaq 100 ETF has fallen by 14% since the start of 2022. That's a pretty large, quick decline for an index that includes many of the biggest technology businesses.
Lower prices don't always translate into better value for stocks.
But there are plenty of high-quality businesses in this exchange-traded fund's (ETF's) portfolio. This is one of the potential reasons to consider this investment.
High-quality businesses
Some of the world's strongest businesses that have dominant market positions in their respective sector are on the NASDAQ, which is one of North America's main stock exchanges.
Apple is a massive player when it comes to smartphones. Microsoft is a leader in the office software, cloud computing, and gaming space (particularly with its Activision Blizzard acquisition). Both of those businesses make up more than 10% of the NDQ ETF portfolio.
Then there's internet search, video streaming, smartphone software and cloud computing business Alphabet. E-commerce and cloud computing giant Amazon is another key player in the ETF's portfolio. Facebook/Meta is another significant position with its various social media leaders like Instagram.
There are plenty of other leaders in the portfolio such as Tesla, Nvidia, Adobe, Broadcom, Costco, Intel, PayPal, Qualcomm, Texas Instruments, Netflix, Intuitive Surgical, Moderna, ASML, Airbnb and Regeneron. There are a total of 100 positions.
As BetaShares points out, with this one trade on the ASX investors can get access to companies like Apple, Amazon and Google that have changed the way we live.
Management costs
Whilst not as cheap as some other ETFs, the Betashares Nasdaq 100 ETF has an annual management fee of 0.48%. This is cheaper than the typical management fee that would be charged by internationally-focused fund managers.
Diversification
Whilst the NASDAQ is tech-heavy, it could be used by Aussies to increase the diversification of their portfolio, both in geographical terms and in industry terms.
The ASX is dominated by the financial industry and resources when it comes to the weightings of the main indices.
The NASDAQ can provide exposure to these giant tech companies, with many of them generating earnings from across the world.
Some investors like the look of the major tech companies
In a recent Bloomberg podcast, Morgan Stanley fund manager Andrew Slimmon said that investor sentiment could leave the growth names for a while. He doesn't think the high-growth names are going to see a V-shaped recovery.
However, he said that the big tech names like Microsoft and Alphabet are not trading at extremely high earnings multiples and are some of the ones that could be opportunities.
