It's been a very pleasant recovery day for the S&P/ASX 200 Index (ASX: XJO) and many ASX shares this Tuesday. At the time of writing, the ASX 200 has rebounded by a confident 1.83%. But let's talk about what's going on with the BetaShares Nasdaq 100 ETF (ASX: NDQ).
If you think the ASX 200's rebound is dramatic, wait until you see what's happened with this popular US-based exchange-traded fund (ETF). NDQ units closed at $40.95 each yesterday afternoon. But this morning, those same units opened at $43.63 before rising as high as $43.84. That was a gain worth an astonishing 7.06% at the time.
At present, investors have tempered that optimism. Even so, the BetaShares Nasdaq 100 ETF remains up a happy 5.52% at present, going for $43.21 per unit.
Of course, this rise comes after weeks of debilitating losses for this popular index fund. NDQ tracks the Nasdaq 100 Index, an index that, in turn, mirrors the performance of the largest 100 non-financial shares listed on America's Nasdaq stock exchange.
The Nasdaq is dominated by America's largest tech stocks, mainly the magnificent seven. As such, it is usually Apple, Microsoft, NVIDIA, Amazon, Alphabet, Meta Platforms and Tesla stock that moves this index, and by extension, the BetaShares Nasdaq 100 ETF.
Even after today's recovery, NDQ units remain down a painful 14.7% over 2025 to date. The fund is also down almost 17% since 18 March.
These losses have almost certainly occurred as a result of the high levels of economic uncertainty that are stemming from the massive trade policy changes coming out of the White House.
Yet last night, we saw a change of tune from American investors. The Nasdaq 100 Index recorded its first rise since 2 April, ticking up 0.19%. This was driven by gains from Amazon, Alphabet, Meta Platforms and Nvidia.
It's not entirely certain why the US markets last night, and the ASX today, are rebounding. Perhaps there's been an influx of investors 'buying the dip'. But what this does prove is that investors are taking a risk by eschewing a good buying opportunity.
NDQ ETF: Don't miss a bargain when it presents itself
Sentiment can turn on a dime in the stock market. Given the ASX 200's 4.2% drop just yesterday, it didn't seem likely that the markets would rebound today. And yet, suddenly, yesterday's lows are looking like a missed buying opportunity. Now, I'm not saying that we've 'seen a bottom' for the NDQ ETF or any other index fund or stock. For all I, nor anybody else know, the markets could keep falling tomorrow, next week and next month.
But this whole experience just goes to highlight how we should never assume that a trend, once started, will continue indefinitely.
On a personal level, I remember 23 March 2020 very well. That was the day that the ASX 200 hit the bottom of its COVID crash. At the time, it just seemed like things had gone from bad to worse. It was only weeks later that it became evident that that day was the low point of the year. And the best buying opportunity we'd seen in almost a decade.
Again, no one knows when the bottom of this bear market will roll around. But going forward, if you see one of your favourite shares trading at a bargain price, history tells us not to hesitate.
