Could BetaShares S&P/ASX Australian Technology ETF (ASX: ATEC) be a good buy after dropping 10% since the middle of April 2021?
What’s happening to the ATEC ETF?
An exchange-traded fund (ETF) is going to perform in line with its underlying holdings. Plenty of the ASX’s largest tech shares have been dropping in recent weeks as worries about growth, inflation and interest rates.
The biggest influence on the portfolio is the largest holdings. Afterpay Ltd (ASX: APT) is 17.9% of the portfolio, Xero Limited (ASX: XRO) is 12.7% of the ETF.
Other businesses that make up more than 1% of the portfolio includes: SEEK Limited (ASX: SEK), Computershare Ltd (ASX: CPU), REA Group Limited (ASX: REA), Carsales.com Ltd (ASX: CAR), Nextdc Ltd (ASX: NXT), WiseTech Global Ltd (ASX: WTC), Altium Limited (ASX: ALU), Link Administration Holdings Ltd (ASX: LNK), TechnologyOne Ltd (ASX: TNE), Codan Limited (ASX: CDA), Megaport Ltd (ASX: MP1), Iress Ltd (ASX: IRE), Appen Ltd (ASX: APX) and Tyro Payments Ltd (ASX: TYR).
There has been an uptick in volatility in recent times.
Is BetaShares S&P/ASX Australian Technology ETF worth buying?
I think that technology is one of the best sectors to own on the ASX. Most tech businesses have plenty of growth potential with good margins.
But, with Afterpay making up almost a fifth of the portfolio, you need to have an opinion about the buy now, pay later business valuation. I’m not convinced that the current Afterpay share price is good value because of how much competition there is.
Compared to most active fund managers, the annual fee is a reasonable at 0.48%.
BetaShares S&P/ASX Australian Technology ETF could be a good buy after dropping 10% since the middle of April 2021. hasn’t been around for very long, but it has done well with a net return of 33.2% over the last year.
Most of the ASX tech shares in the portfolio are interesting businesses with good growth potential. But the valuation of plenty of those ASX shares aren’t very attractive to me. So there are other ETFs and ASX growth shares that I’d rather buy.
