If I Were in My 20s, I’d Buy This Magnificent ETF and Hold It Until Retirement
The Nasdaq-100 is an index of the 100 largest companies listed on the Nasdaq stock exchange, excluding banks and financial institutions. Almost 70% of the value of its entire portfolio is parked in technology stocks, which is why it typically outperforms the more diversified S&P 500 over the long term.
However, the Nasdaq-100 is also more volatile during periods of market turmoil. In fact, it’s currently down 9% from its recent record high, whereas the S&P 500 has declined by just 3%. But for young investors in their 20s, taking a little more risk for the opportunity to earn higher returns can be a worthwhile compromise.
Therefore, if I were that age today, here’s why I’d buy the Invesco QQQ Trust (QQQ +0.65%), an exchange-traded fund (ETF) that mimics the Nasdaq-100, with the intention of holding it until retirement.
Image source: Getty Images.
Packed with the world’s leading tech stocks
The Nasdaq is often the exchange of choice for budding technology companies looking to go public, because it offers fewer compliance barriers and lower fees than alternatives like the New York Stock Exchange. Many of those tech companies have blossomed into trillion-dollar giants and now sit among the top 10 holdings in the Nasdaq-100 and Invesco QQQ ETF.
|
Stock |
Invesco ETF Portfolio Weighting |
Market Capitalization |
|---|---|---|
|
1. Apple |
8.43% |
$5 trillion |
|
2. Nvidia |
8.04% |
$4.6 trillion |
|
3. Alphabet |
6.34% |
$4.1 trillion |
|
4. Microsoft |
4.93% |
$2.9 trillion |
|
5. Micron Technology |
4.31% |
$0.8 trillion |
|
6. Amazon |
4.19% |
$2.4 trillion |
|
7. Advanced Micro Devices |
3.45% |
$0.7 trillion |
|
8. Broadcom |
3.05% |
$1.7 trillion |
|
9. Meta Platforms |
2.96% |
$1.4 trillion |
|
10. Tesla |
2.59% |
$1.2 trillion |
Data source: Invesco. Portfolio weightings are accurate as of July 28, 2026, and are subject to change. ETF = exchange-traded fund.
In November 2022, a start-up called OpenAI launched an artificial intelligence (AI) chatbot called ChatGPT. It amassed a staggering 100 million users in just two months, and thus, the AI revolution was officially underway. The 10 stocks in the above table have delivered a blistering average return of over 500% since the start of 2023, thanks to their unique roles in the AI boom.
Nvidia, Micron, AMD, and Broadcom are four of the world’s top suppliers of data center chips and components for processing AI workloads. There is an ongoing shortage of this critical hardware, which is driving a surge in the revenue and earnings of those companies, hence the substantial gains in their stock prices over the last few years.
But it costs billions of dollars to build AI data centers, and not every business has that kind of money. That’s where Alphabet, Microsoft, and Amazon come into the picture; they build and operate this infrastructure all over the world and rent the computing capacity to businesses that pay only for what they use. Each of the three tech giants has experienced accelerating revenue growth in their respective cloud platforms thanks to this practice.
Meta Platforms is another big buyer of AI chips and components. It primarily uses them to develop its own AI models, which it feeds into the content recommendation algorithms in Facebook and Instagram to keep users engaged.
Outside its top 10 positions, the Invesco ETF also holds AI powerhouses such as Intel, Lam Research, and Palantir Technologies. However, the ETF does offer a splash of diversification with positions in retail giant Costco Wholesale, pharmaceutical company Amgen, and beverage powerhouses PepsiCo and Starbucks.
The Invesco ETF has delivered spectacular long-term returns
While AI is driving the Invesco QQQ ETF higher right now, it has benefited from a number of other technological revolutions since its establishment in 1999, driven by the internet, personal computers, smartphones, enterprise software, cloud computing, and more. As a result, the ETF has delivered a compound annual return of 10.9% over the last 27 years, beating the S&P 500, which climbed by 8.6% annually over the same period.
Today’s Change
(0.65%) $4.44
Current Price
$687.99
Key Data Points
AUM
$453B
Dividend Yield
0.44%
Expense Ratio
0.18%
Top Holdings
NVDA
8.05%
AAPL
7.51%
MSFT
5.72%
That 2.3 percentage-point difference might not sound like much at face value, but it would have made a big impact in dollar terms since 1999 thanks to the magic of compounding.
|
Balance in 1999 |
Compound Annual Return |
Balance in 2026 |
|---|---|---|
|
$10,000 |
10.9% (Invesco ETF) |
$163,362 |
|
$10,000 |
8.6% (S&P 500) |
$92,769 |
Calculations by author.
Despite some recent volatility, the AI boom is likely still in its early stages, and it could set the stage for a number of other technologies to achieve commercialization over the next decade (and beyond). They include autonomous vehicles, humanoid robots, and maybe even quantum computers, each of which could contribute to further upside in the Nasdaq-100 and the Invesco ETF.
As a result, the Invesco QQQ ETF could be a great investment for anyone in their 20s who wants an opportunity to build long-term wealth between now and their retirement in 30 or 40 years.
