If You'd Invested $1,000 in the Invesco QQQ Trust 10 Years Ago, Here's How Much You'd Have Today

Key Points

• The Invesco QQQ Trust is an ETF that aims to match the performance of the Nasdaq-100.

• QQQ is heavily weighted toward technology companies.

• The ETF includes some of the most disruptive and innovative tech companies on the planet.

• 10 stocks we like better than Invesco QQQ Trust ›

The Invesco QQQ Trust (NASDAQ: QQQ) is an exchange-traded fund (ETF) that aims to mirror the performance of the Nasdaq-100 index. Since its inception in 1999, QQQ has rewarded patient investors with massive long-term gains, and it's one of the most popular and heavily traded ETFs in the market today.

QQQ has soared 486% over the past 10 years, turning $1,000 into nearly $6,000. That factors in reinvestment of QQQ's modest dividend, which currently has a 0.50% yield.

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Should you expect QQQ to deliver similar returns in the future? To answer that question, let's look at why QQQ has been such a juggernaut.

Image source: Getty Images.

One tech ETF to rule them all

The Nasdaq-100 is a basket of 100 of the largest nonfinancial companies listed on the Nasdaq Stock Market. But these aren't just any companies.

The top 10 holdings in QQQ are:

Source: Invesco (as of Aug. 26)

With nine of the world's most disruptive tech companies comprising half of QQQ's holdings, it's not surprising that this ETF has been such a beast. Overall, 61% of QQQ is weighted toward technology companies, which is why QQQ is a popular choice for investors seeking exposure to the best of the best in the tech sector.

In case you were wondering, Palantir Technologies is a prominent component of QQQ, sitting just outside the top 10 holdings with a 2% allocation.

By the way, QQQ is more diversified than you might think. Consumer discretionary stocks represent 19% of QQQ's holdings by weight. QQQ also includes healthcare companies, industrials, utilities, consumer staples, energy firms, and even a few railroads.

High growth, low costs

QQQ is considered a passively managed ETF. That's because the goal of QQQ is to closely match the returns of the Nasdaq-100 by mirroring the index's holdings. By contrast, an actively managed ETF aims to outperform a particular index through active stock selection and/or market timing.

An ETF's expense ratio tells you how much of your investment will be deducted annually as management fees. Because QQQ is a passively managed ETF, its expense ratio is lower than you'd find in an actively managed ETF or mutual fund. A passively managed fund doesn't require the constant oversight involved in an active management strategy -- hence the lower fees.

QQQ's expense ratio is 0.20%, which means you'll pay $2 annually for every $1,000 invested. That's a competitive fee -- even for passively managed funds -- considering that the category average is nearly five times higher at 0.92%. At the end of the day, that means less of your investment is going into the pockets of the fund managers.

The power of passive indexing

Investing in passively managed index funds and ETFs -- also known as passive indexing -- is a time-tested wealth-building strategy. Over time, passive index funds often match or even outperform actively managed funds, with lower fees. They also provide instant diversification, helping you avoid single-stock risk.

QQQ is a great way to get exposure to the most disruptive megatrends in tech, including artificial intelligence, electrification, cloud computing, e-commerce, mobile, streaming, and big data. Like the tech innovators that dominate its portfolio, the ETF has a history of massive returns. Since its inception in 1999, QQQ has delivered total returns of 1,200%.

QQQ Total Return Level data by YCharts

If you'd invested $10,000 in QQQ in 1999, you'd be sitting on a cool $130,000 today. Keep in mind that tech stocks can be more volatile than other types of stocks, so the ride would've been a bit bumpy at times. But a long-term, buy-and-hold approach tends to smooth out short-term peaks and valleys. That's a lesson QQQ has been teaching patient investors for over two decades.

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Josh Cable has positions in Alphabet, Amazon, Microsoft, Nvidia, and Palantir Technologies. The Motley Fool has positions in and recommends Alphabet, Amazon, Apple, Meta Platforms, Microsoft, Netflix, Nvidia, Palantir Technologies, and Tesla. The Motley Fool recommends Broadcom and recommends the following options: long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft. The Motley Fool has a disclosure policy.