It's been an absolutely dire start to the trading week for the S&P/ASX 200 Index (ASX: XJO) and most ASX 200 shares this Monday. At the time of writing, the ASX 200 has tanked by a horrid 1.3%, pulling the index down to under 7,760 points. But strangely, that hasn't stopped no less than three ASX exchange-traded funds (ETFs) smashing out new record highs today.
Yep, we've seen three popular ASX ETFs spring to new records this Monday.
First up is the BetaShares Nasdaq 100 ETF (ASX: NDQ). NDQ units are currently up a robust 1.11% at $43.80 each but climbed as high as $43.81 earlier this morning – a new record high.
Then we have the iShares S&P 500 ETF (ASX: IVV). This index fund is presently enjoying a lift of 1.01% up to $54.16 a unit. That's right on this ETF's new record high.
Finally, let's talk about the VanEck MSCI International Quality ETF (ASX: QUAL). QUAL units are trading at $56.61 at the time of writing, up a compelling 0.95% for the day thus far. But those units climbed as high as $57 each earlier this morning, which, you guessed it, is a new record high for QUAL.
So how on earth are these three ASX ETFs hitting new record highs today while the ASX 200 is having such a horror show of a Monday?
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How are these three ASX ETFs hitting new record highs today?
This might seem like a very strange occurrence. But there is a simple explanation for these three ETFs' new highs today. All three are largely uncorrelated to the ASX 200 Index and the performance of ASX shares.
The BetaShares Nasdaq 100 ETF is an index fund that tracks the largest 100 non-financial US shares that are listed on the NASDAQ stock exchange. The NASDAQ is one of the two major stock exchanges over in the United States. This exchange is famous for housing the vast majority of America's tech giants. That's everything from Apple, Amazon and Microsoft to PayPal, Netflix and NVIDIA.
Last Friday night (our time), the US markets exploded higher, in stark contrast to what we're seeing on the ASX today. The NASDAQ-100 Index (NASDAQ: NDX), which the NDQ ETF tracks, rose 0.39% to 19,074.67 points, just a whisker off its all-time high of 19,113.88 points.
As such, it's not too shocking to see an ASX-listed index fund that tracks the NASDAQ respond so enthusiastically to this Friday night move higher on the ASX today.
Different ASX ETF, same holdings
It's a similar story with the iShares S&P 500 ETF. This index fund tracks the S&P 500 Index (SP: .INX). This index is composed of the largest 500 companies on the US markets, drawn from both the NASDAQ and the New York Stock Exchange.
Last Friday night saw the S&P 500 rise 0.26% up to 5,360.79 points. Again, that's only a hair's breadth away from the S&P 500's all-time record of 5,375.08 points.
So again, there's no shock to see an ASX-listed, S&P 500-tracking index fund leap higher today.
The VanEck International Quality ETF is a bit of a different case though. This ETF isn't really an index fund; rather, it is an actively managed ETF that gives investors access to a portfolio of stocks chosen for their fundamental characteristics.
However, this ETF is still very much an international investment. More than 75% of its holdings are currently US shares. Further, its top holdings are the same names that you'll find at the top of both NDQ and IVV's portfolios: Nvidia, Apple, Microsoft and Meta Platforms.
Foolish takeaway
So once more, given the performance of the US markets last Friday night, there's not much mystery as to why this ETF is performing so well today.
The experience of these three ASX ETFs this Monday just goes to show how having a diversified portfolio of shares that includes holdings from outside the ASX can help investors insulate their investments from the woes of a single stock market.
