Now Might Be a Great Time to Buy This ETF

With the markets struggling, many stocks are down and around their lows for the year. And if you’re looking for a stock to invest in but aren’t sure what to buy, a good option can be an exchange-traded fund (ETF).

The BMO NASDAQ 100 Equity Hedged to CAD Index ETF (TSX:ZQQ) can be a good choice for investors. Its returns have closely mirrored the NASDAQ’s and it’s down more than 10% so far in 2020.

It’s safe to say that the markets will recover from this downturn and when that happens, the NASDAQ will rise as well. And that’s where buying the stock today could be an easy way to net a double-digit return without taking on much risk. If the ETF were to return to its previous highs, that would earn investors a return of 25% from where it is today.

The caveat there, however, is that there’s no certainty how long it may take for a recovery to happen. But one thing that history’s shown us is that the stock market recovers from every market crash, and there’s no reason to expect things will be different this time around.

The ETF holds the biggest names on the NASDAQ with Microsoft and Apple making up a combined 23% of its total assets. Amazon is another 9% and is the only other holding that accounts for more than 5% of the total assets.

It’s a tech-heavy ETF but tech stocks can also offer investors significant potential, much more than they might earn will blue-chip dividend stocks.