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This Growth-Focused ETF (QQQ) Has A 421% Return For The Past 10 Years – And Outperforms The S&P 500 Index By Almost 50%
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If you have used a crockpot, you know the value of appliances that combine several ingredients into a good, slow-cooked meal. This explains the allure of exchange-traded funds (ETFs), which allow investors to diversify their portfolios and grow wealth while only making one investment. If you’ve been looking for an ETF that offers solid growth potential, you might like this one that has beaten the S&P 500 Index by almost 50% for the last 10 years.
The Invesco QQQ Trust ETF (Nasdaq: QQQ) is a high-performing ETF featuring a diversified stock portfolio with shares in industry-leading companies across several lucrative sectors. The tech sector is one of the biggest profit drivers on Wall Street and the Invesco QQQ Trust ETF seeks to capitalize on that trend. The top 10 stocks in this ETF include Magnificent Seven stocks and many other holdings in the Nasdaq 100.
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According to the ETF’s homepage and U.S. News’ Money section, over 50% of Invesco QQQ Trust’s portfolio consists of tech stocks. The remainder is made up of carefully selected stocks from other growth sectors, including:
· Communications 16%
· Consumer products 14%
· Utilities, financial services, real estate, energy, industrial-all less than 6% each
Although QQQ is heavily tech-focused, it’s worth noting that QQQ’s stock holdings prioritize companies with robust research and development capabilities. This gives each of these stocks a higher chance of creating an innovation that increases profitability and drives share prices upward.
Another consideration in this ETF’s favor is that the energy sector thrives for several reasons. First, Big Tech is searching feverishly for power sources to fuel the hyperscale data centers that AI needs to expand its capabilities. Second, the incoming Trump Administration has expressed support for fossil fuels. Both of these factors should boost QQQ’s energy sector holdings for at least the next four years.
Most importantly, QQQ has been performing for investors. According to the Invesco website and its public filings, QQQ has generated a return of 156.77% compared to the S&P 500 Index’s 107.92%. QQQ’s 10-year returns of 421.53% radically outpace the S&P 500 Index’s 250.02% and a $10,000 investment in QQQ 10 years ago would be worth $52,153 today.
If there is one knock on QQQ, the high performance doesn’t come cheap. QQQ’s performance history and the fact that it appears positioned to continue delivering for investors have made it a very desirable offering. According to Benzinga, buying into QQQ will cost you $520.90 per share. It does pay a small quarterly dividend of 0.50% per share ($2.60), but QQQ’s long-term growth potential, not passive income, is the main source of its appeal.
Risks to consider would include QQQ’s heavy lean-in on Big Tech, representing more than 50% of the ETF’s shares. However, the explosion in value of those stocks has also driven a lot of QQQ’s growth and tech doesn’t look like it’s slowing down anytime soon. If you can handle the share price and you’re looking for a diversified ETF with high growth potential, the Invesco QQQ Trust ETF is worthy of serious consideration.
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