Investing in the stock market has always been a proven way to build wealth over time. But picking individual stocks? That’s a whole different game—one that even professional fund managers struggle with. In fact, just 15% of them have managed to beat the S&P 500 over the past decade. If the pros with all their resources can’t do it, what chance does the average investor have?
Well, there’s good news. Instead of trying to beat the market, investors can simply track it with exchange-traded funds (ETFs). And while the S&P 500 is a solid choice, one ETF has outperformed it consistently: the Invesco Nasdaq 100 ETF (QQQ).
A Tech-Heavy ETF That’s Beating the Market
The Invesco Nasdaq 100 ETF tracks the Nasdaq-100 Index, which includes the 100 largest non-financial companies listed on the Nasdaq exchange. Unlike the S&P 500, which represents a broader mix of industries, the Nasdaq-100 is dominated by technology—and that has been a huge advantage.
Tech stocks have been the driving force behind market growth for years. Companies like Apple, Microsoft, and Nvidia are not just big names; they’re shaping the future with artificial intelligence (AI) and other innovations.
As of the end of 2024, tech made up nearly 60% of the ETF’s holdings. Another 20% came from consumer discretionary stocks, including Amazon and Tesla—both of which are heavily involved in tech.
A Look at the Top Holdings
The ETF’s top 10 holdings tell the story. Together, they make up more than 50% of the fund’s value, and many are the same tech giants that have been leading the market for years.
| Company | Weighting |
|---|---|
| Apple | 8.8% |
| Nvidia | 7.9% |
| Microsoft | 7.7% |
| Amazon | 6.3% |
| Alphabet | 5.5% |
| Broadcom | 4.5% |
| Meta Platforms | 3.9% |
| Tesla | 3.4% |
| Costco | 2.9% |
| Netflix | 2.7% |
Many of these companies are at the forefront of AI, cloud computing, and automation—industries expected to drive long-term growth.
A History of Strong Performance
Numbers don’t lie, and the performance of the Invesco Nasdaq 100 ETF speaks for itself. Since launching in 1999, the ETF has outperformed the S&P 500 by a staggering 443.4%.
Here’s how it compares to the S&P 500 over key timeframes:
- Past 10 years: +459% (vs. +263% for the S&P 500)
- Past 5 years: +146.2% (vs. +102.6% for the S&P 500)
- Rolling 12-month outperformance: 87% of the time in the past 10 years
That kind of consistency is rare in investing. While no ETF can outperform forever, tech’s growing influence suggests QQQ has a strong chance of staying ahead.
Investing Strategies: Why Consistency Matters
Even the best ETFs go through ups and downs. The key is to invest regularly, regardless of market conditions. One strategy that works well for many investors is dollar-cost averaging—buying a fixed amount of the ETF each month.
Why does this work?
- It removes emotions from investing.
- You buy more shares when prices are low and fewer when they are high.
- Over time, this smooths out volatility and leads to solid long-term returns.
Historically, bear markets have been short-lived, while bull markets last much longer. Investors who wait for the “perfect time” often end up missing out on major gains.
Is QQQ the Right ETF for You?
The Invesco Nasdaq 100 ETF isn’t perfect. Since it’s heavily concentrated in tech, it can be more volatile than the S&P 500. But for investors who believe in the long-term strength of technology, the numbers suggest QQQ is a smart bet.
By owning this ETF, investors get exposure to some of the most innovative companies in the world—many of which are shaping the future of AI, cloud computing, and automation. If history is any guide, that’s a formula for long-term success.
