The Best Nasdaq ETF to Invest $2,000 In Right Now

The Nasdaq Composite is one of the main indexes in the U.S. stock market, providing a broad view by tracking almost all stocks on the Nasdaq stock exchange.

Within this composite is the Nasdaq-100, which focuses specifically on the 100 largest non-financial companies listed on the Nasdaq. Many investors find that investing in the Nasdaq-100 is a popular option due to its more concentrated nature compared to the broader Nasdaq Composite.

If you have $2,000 set aside for investing (ensuring you have an emergency fund and have paid down any high-interest debt), consider the Invesco QQQ Trust (QQQ). This exchange-traded fund (ETF) is an excellent choice for those looking to invest in Nasdaq stocks.

Leading the Charge: Big Tech Investments

While the QQQ ETF includes 101 different stocks, a significant portion is derived from its top 10 holdings, which account for nearly half of the fund's total value. Here are the top holdings along with their share of the ETF:

Company	Percentage of the ETF
Apple	8.79%
Nvidia	8.13%
Microsoft	7.65%
Amazon	6.12%
Broadcom	4.54%
Meta Platforms (Class A)	3.92%
Tesla	2.98%
Costco Wholesale	2.88%
Alphabet (Class A)	2.71%
Alphabet (Class C)	2.65%

Source: Invesco. Percentages as of February 11.

Although having such a high concentration in just 10 stocks may not seem highly diversified, this is a common trait among market-cap-weighted ETFs, especially given the rising valuations of major tech companies. The performance of these leading firms will largely influence how well the ETF does overall. However, it is worth noting that many of these companies have shown excellent returns over the past decade, with Alphabet's Class C shares increasing more than 570%. That's impressive.

Despite some volatility in the early part of 2025, the long-term growth potential for big tech companies remains promising. While some valuations have experienced inflation due to excitement around artificial intelligence (AI), industries like cloud computing, cybersecurity, and semiconductors are just beginning to see their true potential.

It's essential to maintain a long-term perspective and avoid reacting impulsively to short-term market events.

Outperformance Compared to the S&P 500

The S&P 500 is the benchmark for the 500 largest U.S. companies and serves as a crucial point of reference in the stock market.

When comparing performance, many ETFs and stocks measure against the S&P 500 to see if they are outperforming or underperforming. In the case of QQQ, it has consistently outperformed the index.

Potential Returns from a $2,000 Investment

To illustrate the potential benefits of investing in the QQQ ETF, consider a hypothetical scenario where a $2,000 investment was made 20 years ago.

While past results do not guarantee future performance, this example demonstrates the ETF's resilience over the long term. Assuming a modest annual growth rate of just 10%, a $2,000 investment could grow to approximately $5,100 in 10 years and close to $13,000 in 20 years, taking into account the ETF's 0.20% expense ratio.

If you're hesitant about investing the full $2,000 all at once, consider a dollar-cost averaging strategy. This approach allows you to break your investments into smaller amounts—like two $1,000 investments, four $500 investments, or five $400 investments—based on your comfort level.

Using dollar-cost averaging can help mitigate the risks associated with sudden market drops and reduce the impact of volatility.

Investing, ETF, Nasdaq