The Nasdaq Just Entered Correction Territory. 2 ETFs to Buy on the Dip.
It could get rocky, but the long-term appeal remains strong.
The Nasdaq Composite (^IXIC +1.70%) has officially entered correction territory, down nearly 11% from its October high after a 5.5% single-day plunge on November 5. Popular ETFs, including the Vanguard Information Technology ETF (VGT) and the Invesco Nasdaq 100 ETF (QQQM), have followed suit. Both ETFs are down over 10% in the past month, but QQQM is still slightly outperforming the Nasdaq Composite index.
VGT is a pure-play tech ETF with 318 stocks, but its concentration in megacap tech stocks like Nvidia, Apple, and Microsoft has made it very top-heavy. On the other hand, QQQM has a tech sector weighting of 64%, with additional exposure to other sectors like Walmart, Costco Wholesale, and PepsiCo. Both ETFs have had their woes due to Nvidia's sharp decline, but the tech sector is expected to be volatile during market downturns. However, VGT and QQQM still offer long-term growth potential in the tech sector.
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