It's been a bit of a depressing start to the trading week for ASX shares. So far this Monday, the S&P/ASX 200 Index (ASX: XJO) has slipped by a notable 1.03% to back under 7,050 points.
But for the BetaShares NASDAQ 100 ETF (ASX: NDQ), the drop has been even worse.
The US-focused exchange-traded fund (ETF) has lost a nasty 1.92% so far on Monday and is currently trading at $29.55 a unit.
So what's going on here that might explain why this ETF is underperforming the ASX 200 by almost 1% today?
Well, for starters, unlike almost every share on the ASX, the BetaShares NASDAQ 100 ETF has no correlation whatsoever to the Australian share market.
That's because it's an ETF that tracks the NASDAQ-100 Index (NASDAQ: NDX) in the United States, which naturally only comprises shares listed on America's NASDAQ stock exchange. So no ASX shares in this ETF.
So why then is this ETF plunging in value so dramatically today?
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Why is the BetaShares NASDAQ ETF starting the week off so badly?
Well, to answer that, let's check out the NASDAQ 100 Index itself. On Friday night (our time), the NASDAQ 100 fell a hefty 1.95% to 13,242.9 points.
The NASDAQ's largest holdings led these falls. Take Apple Inc (NASDAQ: AAPL). The iPhone maker lost 1.51% last Friday to US$171.52 a share.
Microsoft Corporation (NASDAQ: MSFT) lost 1.39% to US$286.15. Amazon.com Inc (NASDAQ: AMZN) fell by 2.86% to US$138.23, while Tesla Inc (NASDAQ: TSLA) dropped 2.05% to US$890.
Those companies are by far the largest listing on the NASDAQ 100 and, therefore, in the NDQ ETF. In fact, on the latest numbers, Apple accounted for a meaty 13.6% of NDQ's entire portfolio weighting. Microsoft is responsible for a further 10.5%, while Amazon and Tesla add 7% and 4.5%, respectively.
So we can safely say that wherever these companies go, the BetaShares NASDAQ 100 ETF generally follows.
Given the performance of the NASDAQ 100 Index in the US's last trading session, as well as the performances of NDQ's top companies, it's perhaps no surprise that this ETF is having such a tough time on the ASX boards today.
But longer-term investors don't have too much to complain about. As of 31 July, the BetaShares NASDAQ 100 ETF has averaged an annual return of 20.69% per annum over the past five years. This ETF charges a management fee of 0.48% per annum.
