Not too many ASX-listed investments have escaped the carnage we have seen on the share market this Wednesday. At present, the S&P/ASX 200 Index (ASX: XJO) has lost a painful 2.41% and is back to around 6,840 points. But let's discuss the BetaShares NASDAQ 100 ETF (ASX: NDQ).
This exchange-traded fund (ETF) has had a shocker today. The BetaShares NASDAQ ETF has lost a nasty 3.62% so far today, which puts this ETF's units at $27.71 each. Earlier in the trading session, we saw the fund drop as low as $27.58 a unit, which was a loss of around 4% at the time.
So why has this ETF been so much harder hit than most ASX shares today?
Why has the BetaShares NASDAQ 100 ETF tanked today?
Well, to answer that, let's look at what the BetaShares NASDAQ ETF is. This ETF is an index fund, but not one that tracks the ASX 200 or any ASX shares for that matter. Rather, the BetaShares NASDAQ 100 ETF, as its name implies, mirrors the NASDAQ-100 (INDEXNASDAQ: NDX) Index.
The NASDAQ is one of the major stock exchanges in the United States. In contrast to its rival New York Stock Exchange, the NASDAQ tends to host the newer, tech-heavy companies.
Think of names like Apple Inc (NASDAQ: AAPL), Microsoft Corporation (NASDAQ: MSFT), Amazon.com Inc (NASDAQ: AMZN), Tesla Inc (NASDAQ: TSLA), Netflix Inc (NASDAQ: NFLX), and Alphabet Inc (NASDAQ: GOOG)(NASDAQ: GOOGL). All of these tech giants call the NASDAQ home.
Thus, many ASX investors like the BetaShares NASDAQ 100 ETF for the exposure to mostly US tech shares that it can provide.
But today, this is an ETF that has been hit hard. And it's not hard to see why. As an index fund, the BetaShares NASDAQ 100 ETF basically mirrors the index it tracks. Last night saw the NASDAQ 100 Index fall by a painful 5.54% on the US markets to just over 12,000 points.
As such, it's perhaps no surprise we are seeing a heavy fall in the corresponding ETF today. Investors might even be thankful the ETF's falls today are not quite as savage as the index's themselves. We can probably thank currency movements for that.
This latest drop means that the BetaShares NASDAQ 100 ETF is now down a depressing 27% in 2022 thus far. However, this ETF remains up a far more pleasing 101% over the past five years.
