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I love seeing great investments such as ASX-listed exchange-traded funds (ETFs) fall in price because it means we can buy them at better value.
In the long term, I expect the share market to rise because underlying companies are regularly growing their profits. So, any shorter-term decline is an opportunity. It’s like when products go on sale at the supermarket. Our dollars work harder when prices drop.
As the legendary investor Warren Buffett once said:
If you expect to be a net saver during the next five years, should you hope for a higher or lower stock market during that period?
Many investors get this one wrong. Even though they are going to be net buyers of stocks for many years to come, they are elated when stock prices rise and depressed when they fall.
Only those who will be sellers of equities in the near future should be happy to see stocks rise. Prospective purchasers should much prefer sinking prices.
It may be hard to pick which investment to buy, so why not go for ASX ETFs that can give access to a portfolio of great businesses? The two below have dipped recently amid a decline in the overall US share market.
VanEck Morningstar Wide Moat ETF (ASX: MOAT)
This ASX ETF aims to invest in US businesses with strong economic moats, meaning they have competitive advantages.
An economic moat can take various forms, such as cost advantages, regulatory licences, network effects, brand power, intellectual property, and so on.
The MOAT ETF typically invests in about 50 companies, but the analysts managing it only decide to take a position in a company if they believe its current value is significantly lower than what they estimate the business is actually worth.
Currently, its three biggest positions in the portfolio include Gilead Sciences, Bristol-Myers Squibb, and Walt Disney.
That combination of great businesses at good prices has led to impressive returns for the MOAT ETF. Since inception in June 2015, it has returned an average of 16.3%, though I’m not expecting the next decade to be as strong as that. It looks better value after dropping 4.5% since the end of January 2025.
Betashares Nasdaq 100 ETF (ASX: NDQ)
This fund enables investors to gain exposure to 100 of the largest US companies listed on the NASDAQ-100 Index (NASDAQ: NDX).
Many of the world’s leading tech and tech-related businesses are listed on the NASDAQ-100, and this fund allows us to buy many of them.
One of the great things about these tech companies is they have high-profit margins. Ongoing revenue growth is flowing strongly onto profit growth, justifying higher share prices. Their global growth efforts give them enormous growth runways.
Some of the biggest holdings include Apple, Nvidia, Microsoft, Amazon.com, Alphabet, Broadcom, and Meta Platforms.
Many of these businesses are driving the next phase of how we live, such as AI, virtual reality, e-commerce, and so on, which helps add additional earnings avenues.
Impressively, in the five years to January 2025, the ASX ETF has returned an average of 21% per year. I’m not expecting the next five years to be as good, but it shows how much progress the holdings within the ASX ETF are making. The ASX ETF has dropped 4% since 18 February 2025.