Here’s why the Betashares Nasdaq 100 ETF (NDQ) is sinking today

Why is the Nasdaq 100 ETF performing so badly today?

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Key points

  • The ASX 200 is having a fairly flat day this Tuesday 
  • But the Nasdaq 100-based NDQ ETF is faring far worse 
  • So what's up with this ASX tech-heavy ETF? 

Well, the S&P/ASX 200 Index (ASX: XJO) is having a topsy-turvy kind of day so far this Tuesday. After initially opening into green territory this morning, the ASX 200 has whipsawed around, and is currently pretty flat, having lost just 0.03% for the day as it currently stands.

But one ASX exchange-traded fund (ETF) is faring far worse. That would be the Betashares Nasdaq 100 ETF (ASX: NDQ).   

Even though the ASX 200 hasn’t gone far today, NDQ units are presently down a nasty 0.93% at $26.72. So what’s going on with this ASX ETF?

Why is the BetaShares NDQ ETF struggling today?

Well, to answer that, let’s go through what this ETF actually invests in. NDQ is an index fund. But one that only covers the US NASDAQ-100 (INDEXNASDAQ: NDX) Index. The Nasdaq 100 is a US-only index that houses most of the US’ big tech shares. You’ll find famous names like Apple Inc (NASDAQ: AAPL), Microsoft Corporation (NASDAQ: MSFT) and Amazon.com Inc (NASDAQ: AMZN) on this index. Some other notable Nasdaq names include Google owner Alphabet Inc (NASDAQ: GOOG)(NASDAQ: GOOGL), Netflix Inc (NASDAQ: NFLX) and Tesla Inc (NASDAQ: TSLA).

NDQ is an index ETF that mirrors the Nasdaq 100. Thus, the Nasdaq’s largest holdings – Apple, Microsoft and Amazon – are also NDQ’s largest portfolio holdings.

Last night on the US markets, the Nasdaq 100 actually rose by 1.68%, as did Apple and Microsoft shares. However, it was a far different story during after-hours trading. Many US tech shares, including the three named above, plunged during after-hours trading. This seemed to be sparked by the social media company and owner of Snapchat, Snap Inc (NYSE: SNAP), giving quite a pessimistic update to its investors, which we discussed in detail today.    

As it currently stands, futures markets are pointing to some significant selloffs for the Nasdaq 100 in this Tuesday’s trading session. So it’s probably for this reason that the BetaShares Nasdaq 100 ETF is struggling on the share market today. 

John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. Motley Fool contributor Sebastian Bowen has positions in Alphabet (A shares), Amazon, Netflix, Apple, Microsoft, and Tesla. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has positions in and has recommended Alphabet (A shares), Amazon, Apple, BETANASDAQ ETF UNITS, Microsoft, Netflix, and Tesla. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has recommended Alphabet (C shares) and has recommended the following options: long March 2023 $120 calls on Apple and short March 2023 $130 calls on Apple. The Motley Fool Australia has positions in and has recommended BETANASDAQ ETF UNITS. The Motley Fool Australia has recommended Alphabet (A shares), Alphabet (C shares), Amazon, Apple, and Netflix. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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