Year to date, the Dow Jones has fallen around 16% while the NASDAQ is down around 3%. Stocks haven’t had a great year in 2020 thus far as the coronavirus pandemic has put investors on edge that a lengthy recession could be around the corner.
However, one way for investors to minimize some of their risk is through diversification. Investing in several different stocks can help give investors a way to avoid too much exposure to any single stock.
A great way to do that is by investing in an exchange-traded fund (ETF). One that’s been doing well this year actually holds many of the top stocks on the NASDAQ – the BMO Nasdaq 100 Equity Hedged to CAD Index ETF (TSX:ZQQ). It’s up around 1% since the start of the year, which is better than both the Dow Jones and NASDAQ.
It’s proven to be a solid long-term investment as it’s up over 88% over the past five years. Tech stocks are one of the safer places to invest these days especially as people look to practice social distancing.
Using technology is a way where people can remain connected amid the coronavirus pandemic and that’s one of the reasons investors may be a bit bullish on this ETF – it could perform well during these challenging times.
With stocks like Facebook (NASDAQ:FB), Netflix (NASDAQ:NFLX), Amazon (NASDAQ:AMZN), Microsoft (NASDAQ:MSFT), and Apple (NASDAQ:AAPL) among its top 10 holdings, the fund gives investors exposure to some of the top stocks in North America.
The NASDAQ 100 ETF is a strong buy for the long term and may even produce great returns in the short term as well.