BetaShares NDQ Volatility: Tech Sector Wobbles Amid Treasury Yield Surge
The US tech sector is experiencing volatility due to surging Treasury yields, which have rattled technology and chip stocks. The Nasdaq-focused BetaShares Nasdaq fund (ASX:NDQ) has been affected by this trend.
The fund's value in Australian dollars was impacted by the climb in US Treasury yields, but its unhedged currency exposure softened the blow for local owners. As the US dollar firmed up, the Australian dollar weakened, which partly offset the decline in US share prices when translated back into local terms.
Concentration in a few AI giants, such as Nvidia and Apple, significantly influences the fund's performance. When these companies move sharply, the fund follows suit, regardless of the rest of the portfolio's activity. The broad US market has never been more concentrated in just a pair of stocks, and the Nasdaq-focused index is even more skewed toward mega-cap technology.
The Fed's rate hike expectations continue to drive bond yields and, subsequently, technology valuations. Until the rate outlook stabilizes, volatility in the Nasdaq is likely to persist.