If You'd Put $3,000 Into QQQM 5 Years Ago, Here's What You'd Have Now
Key Points
The Invesco Nasdaq-100 ETF (QQQM) has delivered average annual returns of about 13.1% for the past five years.
After accounting for fees, a $3,000 investment in QQQM five years ago would have grown to more than $5,545 today.
The past few years have seen a big boom in technology stocks. Owning a tech-heavy exchange-traded fund (ETF) has been an easy, low-cost way to invest in this sector. The Invesco Nasdaq 100 ETF (NASDAQ: QQQM) tracks the 100 largest non-financial stocks in the tech-heavy Nasdaq-100 index.
In the past five years, QQQM has delivered annualized total returns of about 13.1%. It has outperformed the S&P 500 (SNPINDEX: ^GSPC) 12.6% average total return.
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This solid performance by QQQM is impressive, given the 2022 bear market, when the Nasdaq-100 declined by about 33% in one year.
There's no guarantee that tech stocks or any ETF are the best choice of investment for the future. But seeing how much this tech ETF has grown in five years can help investors understand the value of long-term perspective.
Let's look at how much $3,000 could have grown in five years of investment with QQQM.
QQQM: 5 years of 13.1% annualized returns
Let's assume that you invested $3,000 as a one-time investment in the Invesco Nasdaq 100 ETF (QQQM) five years ago. And you left that money alone to grow with compound interest. QQQM earned average annual returns of 13.1% by net asset value for the past five years.
The fund charges a 0.15% expense ratio, so for the purpose of this estimate, let's subtract that fee from the 13.1% returns. We're now assuming that you invested $3,000 in QQQM and earned 12.95% annualized returns for five years.
After five years of investing in QQQM, your money would have nearly doubled to $5,545.
Ben Gran has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.