Nasdaq Composite Index is lower by over 20% than what it was a year back. What it means is that the Nasdaq Composite is in a firm grip of the bears after falling more than 20% from its previous highs. Many stocks have fallen more than the index itself. The million-dollar question is whether it is time to start buying or adding stocks. If you don’t have a clear answer to it (in fact, no one has an answer now), you may consider buying all of them. Yes, buying individual stocks is riskier than buying them all. The stock you pick may underperform while the one you didn’t, may outperform. Therefore, picking all of them together through an exchange-traded fund is the solution.
For taking exposure to the Nasdaq Composite Index, one may consider buying an ETF that tracks the index itself. The Fidelity Nasdaq Composite Index ETF is the one that gives access to investors to take exposure to Nasdaq Composite Index.
Fidelity Nasdaq Composite Index ETF (ONEQ) is a passively managed exchange-traded fund created to offer broad exposure to the US stock market’s Large Cap Growth sector. Traded on Nasdaq under the ticker symbol ONEQ, the units can be purchased and sold anytime during the trading hours of the stock exchange.
The investment in ONEQ aims to offer investment returns that closely match the Nasdaq Composite Index’s price and yield performance. Some of the top holdings of ONEQ are Google (Alphabet), Apple, Microsoft, Amazon, Tesla, NVIDIA, Meta Platforms, PepsiCo, Costco Wholesale.
The Gross Expense Ratio of ONEQ is 0.21% and therefore is a low-cost way of participating in equities representing top US stocks. The NAV inception date of ONEQ is September 25, 2003. The quarter-end average annual total returns for ONEQ are close to what the index has generated over all periods since inception.
But, before you invest in ONEQ, here’s a low down of the Nasdaq Composite index – the one it is benchmarked to.
The Nasdaq Composite Index comprises all Nasdaq domestic and international stocks listed on the Nasdaq Stock Market. The value of all the listed stocks on the Nasdaq is reflected in the market cap-weighted. When it comes to the breakdown of industries, technology commands over half of the weight of the Nasdaq Composite Index. The consumer services industry comes in second with almost 20%, and health care comes in third with almost 10%. With more than 900 enterprises, the health care sector is the clear winner when it comes to the number of businesses in a given industry.
Importantly, the Nasdaq Composite index differs from Nasdaq 100. There is no exposure to any financial stock in the Nasdaq 100, which is a significant distinction between it and the Nasdaq Composite index.