Nasdaq 100 is all about technology stocks and currently the entire sector is bearing the brunt of the stock market meltdown. Some of the stocks in Nasdaq 100 have fallen by over 35 per cent while the index itself is down by almost 25 per cent year-to-date.
Long term investors especially those who look for contra opportunities may soon start looking at the valuations to begin adding or buying many of these fallen stocks. If selection of stocks is a difficult task as a retail investor, there’s an exchange traded fund (ETF) that is essentially a basket-buy of all the stocks represented in an index or a theme.
Invesco QQQ is an ETF that tracks the Nasdaq 100 index. Today’s price of Invesco QQQ ETF is $286.95.
By buying Invesco QQQ ETF, you end up taking exposure in the entire 100 stocks of the index. Facebook (FB), Amazon (AMZN), Apple (AAPL), Netflix (NFLX) and Google collectively known as FAANG stocks are a part of the Nasdaq 100 index.
Currently, Invesco QQQ ETF is down by almost the same percentage as Nasdaq 100 as it mirrors the index. Data shows that Invesco QQQ ETF has outperformed S&P 500 over longer time horizons.
For Invesco QQQ ETF, the best 3 Month Period was June – August 2020 when it generated 30.22% while the Worst 3 Month Period was November – January 2009 when it fell by 36.60%.
Invesco QQQ with an expense ratio of 0.2 per cent is a low-cost way of owning the bucket of stocks in the Nasdaq index through the ETF route. An investor should consider investment objectives, risks, charges and expenses carefully before investing. You can even start investing with a small amount and provide global diversification to your Indian portfolio of domestic companies.