The Nasdaq-100, a subset of the Nasdaq Composite index, offers investors a concentrated exposure to the largest non-financial stocks in the US market. For those looking to tap into growth opportunities, a Nasdaq-100 exchange-traded fund (ETF) like the Invesco QQQ Trust is an attractive option.
This popular ETF has consistently delivered strong returns, boasting over 930% growth since its inception in 1999. Its market-beating performance has been fueled by the convergence of several megatrends: artificial intelligence, cloud computing, and electric vehicles. The top holdings, including Apple, Nvidia, Microsoft, and Amazon, are well-positioned to benefit from these trends.
While diversification is essential, the Nasdaq-100 ETF’s concentration in a few large companies does raise concerns about its ability to withstand market volatility. However, with 10 companies accounting for over 52% of the fund, it remains an attractive option for investors seeking exposure to growth stocks. The expense ratio of 0.2% is relatively reasonable, especially considering the huge growth opportunities ahead.
As the global EV market is expected to reach nearly $1.9 trillion by 2032, Tesla and its partners are well-positioned to capitalize on this trend. Meanwhile, AI and cloud computing continue to gain momentum, driven by technological advancements in graphics processing units, data centers, semiconductors, machine learning, and other tools needed for training AI.
With a proven track record of market-beating performance, the Invesco QQQ Trust is an excellent choice for investors seeking exposure to the Nasdaq-100. While it may not be the cheapest option, its benefits and huge growth prospects make it a compelling addition to any portfolio.
Source: https://www.fool.com/investing/2024/12/15/want-to-invest-in-the-nasdaq-this-etf-is-a-great-o