ASX NASDAQ (NDQ) ETF: Up 30% in a year, should you buy now or wait?

Tech continues to dominate in 2024. Will this continue?

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The BetaShares NASDAQ 100 ETF (ASX: NDQ) has been a standout on the ASX in 2024, given its direct exposure to markets in the United States.

The exchange-traded fund (ETF) tracks the performance of the NASDAQ-100 Index (NASDAQ: NDX), net of fees and costs.

The NASDAQ is a basket of the top 100 largest non-financial companies listed on the US exchanges. Since its formation in 1985, its composition has been heavily weighted toward technology.

The ASX NDQ ETF has rallied around 30% over the past year and closed trading on Thursday at $44.64 per share.

With this impressive run, many investors may be wondering if now is the right time to buy or if they should wait for a better opportunity.

Asset management giant Lazard released its half-yearly market commentary. Here's a look at what the firm said and what it means for the ASX NDQ.

Why the ASX NDQ ETF is thriving

The ETF is heavily weighted in technology and innovation, which have been key drivers of its performance.

Specifically, it has benefitted from the robust performances of major tech giants in the US in 2024.

Dubbed the Magnificent 7 among market commentators, companies like Apple Inc (NASDAQ: AAPL), Nvidia Corp (NASDAQ: NVDA), and Microsoft Corporation (NASDAQ: MSFT) are a few of the tech darlings that have driven the fund's growth – with Nvidia almost tripling in value over the year.

But Lazard sees potential risks in this trend continuing at the same rate of dominance.

According to Ronald Temple, Lazards's chief market strategist, the ongoing technology and artificial intelligence (AI) boom has contributed significantly to the market's recent gains.

That's great, but it might not last forever, Temple warns. This could impact the ASX NDQ ETF.

If this overall market growth is to be sustainable, tech companies must demonstrate a return on investment from their tech and AI expenditures.

Other non-tech companies must start to pull their weight as well, Temple says:

From my perspective, the only way the mega-cap tech companies can continue to deliver market-beating earnings growth is if their customers realize a return on investment from buying their goods and services…

… Upside from current levels will need to be driven by earnings growth and a broadening of the equity market rally beyond a small number of technology-related companies.

Despite these concerns, the long-term outlook for tech remains positive. Slowing US inflation, which Lazard expects "to decelerate" by the end of 2024, supports this outlook.

Is now the right time to buy?

With its FY24 performance, the question is whether investing in the NDQ ETF right now is a smart move.

Many are looking into the coming 12 months as well. Additionally, there are interest rate decisions. There is also inflation. Furthermore, unemployment rates are a factor. There are also trade deficits. You name it.

But all of this is just noise for the patient, long-term investor.

Attempting to time the market is a fool's game (and not our kind of Fool!). Lazard's Temple agrees. He says that owning stocks over the long term is "among the best" investment strategies.

"[B]ut", he adds, " it is important to be fully invested through the cycle and to not try to time the markets."

In fact, one recent analysis indicated that over the 20 years from 2003 to 2022, investors who missed the 10 strongest up-days in the US equity market forfeited over half of the total return from the entire investment period.

While no one likes to buy at the peak, it's also important to recognise that five years from now, such a purchase, if targeted based on the quality of the investment and the valuation thereof, will often be seen as a wise decision.

Foolish takeaway

The ASX NDQ ETF has shown remarkable growth. If you're looking to add a tech-heavy ETF to your portfolio, this might be a good option. It depends on your view of the sector.

However, keep an eye on market conditions and consider your personal financial circumstances, always seeking professional advice.

Motley Fool contributor Zach Bristow has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has positions in and has recommended BetaShares Nasdaq 100 ETF. The Motley Fool Australia has positions in and has recommended BetaShares Nasdaq 100 ETF. 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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