The Smartest Index ETF to Buy With $1,000 Right Now

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Geoffrey Seiler, The Motley Fool

Tue, Apr 1, 2025, 2:55 AM 4 min read

Right now, determination is simply a batch of uncertainty successful the banal market. While stocks person bounced disconnected their caller lows, the large marketplace indices are inactive good disconnected their highs and prone to volatility. Technology stocks, which had led the marketplace higher successful the past fewer years, person peculiarly struggled successful caller months.

Much of this stems from fears astir the system and the existent on-again, off-again tariffs and imaginable commercialized wars. In addition, determination is immoderate interest that artificial quality (AI) infrastructure spending could statesman to chill successful coming years, which has impacted tech stocks. For example, determination person been reports that Microsoft is pulling backmost connected immoderate information halfway projects. However, its information halfway superior expenditures (capex) are inactive connected the emergence this year, and others are besides spending big.

Despite the caller dip successful tech banal prices, the assemblage has inactive been 1 of the champion places to put implicit the past decade. Today, tech companies person grown to go immoderate of the largest companies successful the world. In fact, 8 of the apical 10 stocks by marketplace headdress successful the S&P 500 (SNPINDEX: ^GSPC) are classified arsenic exertion stocks, oregon they person precise ample tech components to them.

For investors looking to instrumentality vantage of this dip successful tech stocks, determination is 1 large exchange-traded money (ETF) to buy: the Invesco QQQ ETF (NASDAQ: QQQ).

The Invesco QQQ ETF tracks the show of the Nasdaq-100 index, which consists of the 100 largest nonfinancial stocks connected the Nasdaq exchange. The index, and frankincense ETF, is heavy weighted toward growth, and successful particular, tech stocks.

At the extremity of 2024, astir 60% of the ETF's holdings were successful the exertion sector. However, immoderate ample companies with ample tech components get grouped into different sectors. Amazon and Tesla, for example, are classified arsenic user discretionary stocks. Amazon operates the largest unreality computing concern successful the world, and this conception makes up the bulk of its profits, truthful it is each spot a exertion institution arsenic it is simply a retailer.

Here is simply a database of the Invesco QQQ ETF's apical holdings and their weightings arsenic of March 26, 2025:

Holding

Weighting

Holding

Weighting

1. Apple	9.1%	6. Broadcom	3.8%
2. Microsoft	7.9%	7. Meta Platforms	3.6%
3. Nvidia	7.6%	8. Netflix	2.8%
4. Amazon	5.8%	9. Costco Wholesale	2.8%
5. Alphabet	5.1%	10. Tesla	2.7%

Data source: Invesco.

This weighting toward tech and maturation stocks has helped pb the ETF to a beardown show implicit the years. As of the extremity of February, the ETF has generated a cumulative instrumentality of 407.4% implicit the past 10 years. That easy surpasses the 238.8% instrumentality of the S&P 500 implicit the aforesaid period. Meanwhile, the ETF has outperformed the S&P 500 implicit 12-month rolling monthly periods 87% of the clip implicit the past decade, and 84% of the clip successful the past 5 years.