Exchange-traded funds (ETFs) are a great way to invest. Most combine diversification, low fees, and solid performance, making them an ideal choice for investors who want to set a goal and forget it.

So today I’m going to reveal my top pick among all index ETFs and examine why it’s likely to remain a great choice in the future.

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Which index ETF is best?

For me there is a clear choice when it comes to which index ETF I want to own for the long term. This is the Invesco QQQ Trust ETF Series I (NASDAQ:QQQ).

Total return level QQQ data by Y Charts

This fund is linked At Nasdaq-100 index, which tracks 100 stocks listed on the Nasdaq stock exchange. Top titles include all of the “Magnificent Seven:” Apple, Nvidia, Microsoft, Amazon, Alphabet, Meta PlatformsAnd Tesla.

Additionally, many other leading tech stocks like Broadcom, NetflixAnd Advance Microphone Devices are included among his assets.

What you won’t find are financial values. Typically, the Nasdaq-100 excludes all stocks from the financial sector.

Due to its heavy allocation to technology stocks, the index, and by extension, the fund, was the best performer. benchmark over the last 10 years – hands down.

For example, when comparing the fund to others that follow the S&P500THE Dow Jones Industrial Indexand the Russell 2000the superior performance of the Invesco fund shines through.

Total return level QQQ data by Y Charts

Over the past decade, the fund has generated compound annual growth rate (CAGR) by 19%, which means that an investment of $10,000 made at the beginning of the period would have grown to almost $57,000 today.

On the other hand, the SPDR S&P 500 ETF Trustan ETF that tracks the S&P 500 Index, generated a CAGR of 13.9%. THE SPDR Dow Jones Industrial Average ETF ranked third with a CAGR of 12.6%, and the iShares Russell 2000 ETF came in last with a CAGR of 9%.

What’s morethese are total returnswhich means that dividend payments have been included in the calculation of the annual return. On a strictly price return basis, the Nasdaq-linked fund performs even better than other benchmarks.

Why this fund is likely to outperform in the future

So it’s clear that the Invesco fund has been the better choice over the past decade – but what about the future? Why should investors always consider the fund the best choice?

THE main reason why the the fund is a solid investment is his goal on innovative and growth-oriented companies. Let’s take the example of one of the fund’s top holdings, Nvidia.

Nvidia grew its annual revenue by $26 billion in 2022 to close to 100 billion dollars today. Over the next two years, analysts expect the company to annual revenues will climb to nearly $180 billion.

Few companies in the world can match this type of growth, but some of them are found within the Nasdaq-100.

Furthermore, the Nasdaq-100 is not only complete technological stocks. There are well-run companies in other industries as well.

Take Costco wholesaleFor example. It is one of the fund’s main holdings. The company generates more than $250 billion in sales each year, And he has grown its revenue at an annual rate of about 9% for a decade.

In summary, the Invesco fund’s focus on growth-oriented companies bodes well for its future prospects and makes it a smart choice for investors.

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John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Suzanne Frey, an executive at Alphabet, is a member of the board of directors of The Motley Fool. Randi Zuckerberg, former director of market development and spokesperson for Facebook and sister of Meta Platforms CEO Mark Zuckerberg, is a member of The Motley Fool’s board of directors. Jake Lerch has positions in Alphabet, Amazon, Invesco QQQ Trust, Nvidia and Tesla and has the following options: long November 2024 $610 calls on SPDR S&P 500 ETF Trust and short November 2024 $600 calls on SPDR S&P 500 ETF Trust . The Motley Fool holds positions and recommends Advanced Micro Devices, Alphabet, Amazon, Apple, Costco Wholesale, Meta Platforms, Microsoft, Netflix, Nvidia 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.