4 Reasons to Buy Invesco QQQ Trust Like There's No Tomorrow

Key Points

• Investors should be bullish on technological trends if they're considering the Invesco QQQ Trust.

• This ETF has produced a monster total return of 449% in the past decade.

• You don’t need to be an expert in financial analysis or corporate strategy to reap this ETF's rewards.

• 10 stocks we like better than Invesco QQQ Trust ›

Exchange-traded funds (ETFs) are an excellent choice for many investors looking to gain exposure to the stock market. This is especially true for those who have no interest in picking individual businesses.

Many ETFs track the S&P 500 index, the most closely watched proxy for the performance of the overall stock market. And it has historically done a good job of compounding capital.

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However, I believe there are better options available. The Invesco QQQ Trust (NASDAQ: QQQ) immediately comes to mind. Here are four reasons to buy this ETF like there's no tomorrow.

Image source: Getty Images.

1. Tech exposure

Unlike the S&P 500, the Invesco QQQ Trust contains the companies in the Nasdaq-100 index. These are the 100 biggest nonfinancial businesses that trade on the Nasdaq exchange.

Investors need to dig deeper to understand what exactly they'd be owning. It's worth highlighting that the technology sector represents a whopping 61% of the assets in the Invesco QQQ Trust. This part of the market has certainly produced many winners.

Consequently, investors will essentially be betting on various technological trends, which has worked out well in the past. The "Magnificent Seven" group reigns supreme in the QQQ. These companies have benefited from some powerful secular tailwinds, like digital advertising, digital payments, cloud computing, streaming entertainment, and e-commerce. We also can't forget about artificial intelligence, which could bring in a new phase of growth.

Investors will also gain meaningful exposure to the consumer discretionary sector, as it has a 19% weighting in the portfolio.

2. Strong performance

The Invesco QQQ Trust's performance has crushed the S&P 500's. In the past decade, the former has put up a total return of 449%, which would've grown a starting $10,000 investment into almost $55,000 today (as of July 25). On an annualized basis, the return of 18.6% is truly exceptional. This gain certainly puts it ahead of the vast majority of professional money managers.

No one knows what the future will hold. The worst thing investors can do, though, is expect that forward returns will exactly resemble those of the past. The QQQ could end up doing worse over the next 10 years, depending on many factors like the state of the economy, innovation trends, earnings growth, and interest rates.

3. Low fees

Investing in the stock market doesn't have to cost you an arm and a leg. The Invesco QQQ Trust proves this point. It carries an expense ratio of just 0.20%. For a $10,000 investment, only $20 every year goes to the ETF sponsor. You keep more of your money over time.

This flies in the face of how the investment management industry typically works. Some investors have no problem paying high fees to fund managers who actively manage portfolios. But their track records are abysmal, as most lose to the market over the long run. Here's where the Invesco QQQ Trust shines.

4. Hassle-free

It's important that investors pay close attention to what the Invesco QQQ Trust owns, its performance, and its fee structure.

But another compelling aspect of buying and holding this ETF is that it's a hassle-free and low-maintenance approach to investing in the stock market. This strategy requires no time commitment and no advanced knowledge of financial modeling or business strategy. This frees up time for other things in life that are more important.

Putting money to work in the Invesco QQQ Trust is a great decision. Your portfolio will thank you.

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Neil Patel has positions in Invesco QQQ Trust. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.