1 Tech ETF to Load Up On and Hold for the Long Haul

Over the past decade, the stock market has been dominated by the tech sector, and it honestly hasn't been close. Now, nine of the world's 10 most valuable public companies are tech companies, all with a market capitalization above $1.5 trillion (as of May 14).

Many people made a lot of money investing in tech stocks over the years, but there are still plenty of growth opportunities ahead for the sector. Instead of trying to pick the "winners," one of the best ways to benefit is by investing in a tech exchange-traded fund (ETF).

There are no shortages to choose from, but a good go-to is the Invesco Nasdaq 100 ETF (NASDAQ: QQQM). Here's why.

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A de facto tech ETF

QQQM mirrors the Nasdaq-100, which tracks the 100 largest non-financial companies trading on the Nasdaq stock exchange. Although it's not a pure-play tech ETF where every stock is a tech stock, the tech sector accounts for over 63.6% of QQQM, so it has a large influence on its performance.

All of QQQM's top 10 holdings are tech companies (including both Alphabet classes), and the worst performer in the past five years is Microsoft, up 66.7%. Surprisingly enough, Microsoft and Amazon are the only two stocks in the top 10 holdings to underperform the S&P 500 in that span. The others have comfortably outperformed it.

The performance of the top 10 holdings is noteworthy because they account for a lot of the ETF. The top 10 holdings together account for 47.7%:

• Nvidia: 9.03%
• Apple: 7.22%
  
• Microsoft: 4.95%
  
• Amazon: 4.77%
  
• Micron: 4.11%
  
• Alphabet (Class A): 3.86%
  
• Tesla: 3.66%
  
• Alphabet (Class C): 3.57%
  
• Advanced Micro Devices: 3.30%
  
• Broadcom: 3.25%

So while QQQM might not be a pure-play tech ETF, it goes where big tech leads it. It's a tech ETF with a built-in hedge from other sectors.

It's more than just AI

QQQM covers a lot of ground in the tech world. Investing in it means investing in much of the technology hardware we use, the world's largest cloud platforms, enterprise software that billions rely on, semiconductor giants, and much of the infrastructure powering technology altogether.

Yes, AI has been a huge catalyst for QQM's recent success, but it's broad enough that even if (or when?) the current AI boom slows down, it's enough overall tech exposure that it isn't strictly reliant on it. That's a better long-term route than some AI-specific ETFs that are do-or-die by how AI works out over time.

QQQM has only been around since October 2020 (it's the newer, cheaper version of the popular Invesco QQQ ETF), but the Nasdaq-100 has consistently outperformed the market. Over the past 30 years, it has averaged 13.8% annual returns, compared to the S&P 500's 8.5%.

Past performance doesn't guarantee future results, but I trust QQQM to continue beating the market over the long term because of the growth prospects of the tech sector as a whole.

Stefon Walters has positions in Apple and Microsoft. The Motley Fool has positions in and recommends Advanced Micro Devices, Alphabet, Amazon, Apple, Broadcom, Micron Technology, Microsoft, Nvidia, and Tesla. The Motley Fool has a disclosure policy.