Index exchange-traded funds (ETFs) are a great way to invest. Most combine diversification, low fees, and solid performance; This makes them an ideal choice for investors who want to set it and forget it.

Today, I’ll reveal my top pick among all index ETFs and examine why it will remain an excellent choice in the future.

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Which index ETF is best?

There’s a clear choice for me when it comes Which index ETF do I want to own for the long term? This Invesco QQQ Trust Series I ETF (QQQ 0.61%).

QQQ Total Return Level data Y Charts

this fund linked to Nasdaq-100 An index that tracks 100 stocks listed on the Nasdaq exchange. The best holdings include it all between “Magnificent Seven:” Apple, Nvidia, Microsoft, Amazon, Alphabet, Meta PlatformsAnd Tesla’s.

Plus, many other leading tech stocks broadcom, netflixAnd Developed Micro Devices including among its holdings.

What you won’t find are financial stocks. As a rule, Nasdaq-100 excludes stocks in the financial sector.

The index, and by extension the fund, was the best performing fund due to its heavy allocation to technology stocks. comparison index in the last 10 years — hands down.

For example, when comparing the fund to other funds that follow S&P 500, Dow Jones Industrial IndexAnd Russel 2000The superior performance of the Invesco fund stands out.

QQQ Total Return Level data Y Charts

In the last decade, the fund compound annual growth rate (CAGR) 19%, which means a $10,000 investment made at the beginning of the period will grow to almost $57,000 today.

Against this, SPDR S&P 500 ETF TrustAn ETF tracking the S&P 500 index produced a CAGR of 13.9%. SPDR Dow Jones Industrial Average ETF It ranked third with a CAGR of 12.6%, while the iShares Russell 2000 ETF came in last with a CAGR of 9%.

Moreoverthese total returni.e. dividend payments was included In annual return calculation. Strictly on a price return basis, the Nasdaq-linked fund outperforms other benchmark indices.

Why is this fund likely to outperform in the future?

So it’s clear that the Invesco fund has been the best pick in the last decade; What about the future? Why should investors still consider the fund the best option?

the main reason for this the fund is a solid investment Is it his focus? It is aimed at innovative, growth-oriented companies. Consider Nvidia, one of the fund’s biggest holdings.

Nvidia will increase its annual revenue from $26 billion in 2022 close Today it is 100 billion dollars. Analysts expect the company to annual revenue will jump to almost $180 billion.

Few companies in the world can afford this kind of growth, but some from them found Within Nasdaq-100.

Moreover, Nasdaq-100 is only fully loaded technology stocks. There are well-managed companies in other sectors as well.

To take Costco WholesaleFor example. It is one of the fund’s biggest assets. The company generates over $250 billion in sales each year, And IT It grew its revenue at approximately 9% annually over the course of a decade.

In summary, the Invesco fund’s focus on growth-oriented companies bodes well for its future prospects and makes it a smart choice for investors.