In This Article:
Key Points
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A heavy focus on tech-driven enterprises has worked wonders for this popular ETF that has crushed the S&P 500 in the past decade.
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A low expense ratio means that investors keep more of their money over time.
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Recent market turmoil, driven by economic uncertainty, is providing investors with a buy-the-dip opportunity.
If investors want broad access to the stock market in their portfolios, they usually direct their attention to the S&P 500 (SNPINDEX: ^GSPC). The popular benchmark is a gauge to measure the performance of U.S. equities at large. And in the past decade, it has generated a total return of 213% (as of April 28). Not too shabby.
But what if you want greater exposure to a particular industry or theme, such as technology? There are specific exchange-traded funds (ETFs) for that. In fact, one booming ETF has crushed the S&P 500 in the last 10 years.
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Here's a look at the best tech ETF to invest $2,000 in right now.
Betting on powerful secular trends
The internet has and will continue to shape our economy and society. With this in mind, it makes sense why investors might want to skew their portfolios more to technology businesses.
Instead of the S&P 500, it's time to learn more about the Invesco QQQ Trust (NASDAQ: QQQ). This ETF tracks the performance of the Nasdaq-100, which consists of the largest 100 nonfinancial companies that trade on the namesake stock exchange.
The top 10 stocks represent a sizable 49% of the portfolio. Unsurprisingly, the "Magnificent Seven" stocks have a monumental impact on the ETF's performance. So, if investors aren't bullish on these businesses and the trends that power them, like digital advertising, digital payments, cloud computing, electric vehicles, and artificial intelligence (AI), then it might be a good idea to think twice.
However, if you're optimistic about these tailwinds looking toward the future, the Invesco QQQ Trust is a smart choice. The added benefit is that there's instant diversification, eliminating the need to successfully pick individual stocks.
The Invesco QQQ Trust currently has $298 billion in assets under management. This figure is worth pointing out because it highlights the huge scale of the ETF, showcasing how much capital believes in this strategy. In other words, investors aren't wasting time considering an esoteric fund that has minimal assets or public interest.