Forget Nvidia: This Top ETF Could Turn $25,000 Into Over $1 Million

Nvidia is a stock that has been synonymous with generating high-powered returns in recent years. The chipmaker is a major player in the artificial intelligence market, as its chips are the go-to option for many tech companies building their chatbots and other next-generation products. But Nvidia isn’t a cheap investment either — its market cap is about $3 trillion. Trying to earn a high return on a stock that is already one of the most valuable companies in the world won’t be easy, especially since expectations are so high for the business right now.

If you want to make a big profit and turn $25,000 into more than $1 million, there is a safer and better way to do it – assuming you’re willing to be patient. An exchange-traded fund (ETF) can allow you to generate some massive gains over the years while still allowing you to keep your risk fairly low. You won’t have as much exposure to a single stock as you would if you only bought Nvidia stock.

An ETF that may be ideal for growth investors is Invesco QQQ Trust (QQQ 2.53%). Here’s why it can be a no-brainer purchase.

The Invesco fund offers investors broad diversification across many growth stocks

If you want exposure to the world’s biggest growth stocks, chances are you’re looking at Nasdaq stock market, where many top tech stocks are traded. The Invesco fund will further narrow the list, however, giving you exposure to only the top 100 non-financial stocks on the exchange. This means you’ll avoid some of the riskier stocks on the Nasdaq. In return, you’ll get access to some of the best and brightest growth stocks in the world.

Nvidia is one of the top holdings in the ETF, but it only makes up 8% of its total weight. The ETF also holds shares of Costco Wholesale, Alphabet, Amazonand many other famous actions. While heavily skewed toward technology stocks (they make up half of the fund), other market sectors are also represented in the fund, including healthcare, industrials and consumer discretionary stocks. Collectively, these actions can help you generate strong and consistent returns over the years.

How ETF can help you grow your portfolio to $1 million

For a $25,000 investment to turn into $1 million or more, it will need to grow 40 times its initial value. To accumulate that kind of profit, you’ll want to focus on the long term, such as a 25- to 30-year period. That way, you don’t set your expectations too high or focus on risky small-cap stocks that may appear to have a lot of upside.

Over a 25-year period, you would need to average a compound annual growth rate (CAGR) of about 15.9% for an investment to grow to 40 times its original value. But if you can stay invested for 30 years, the required CAGR drops to 13.1%.

Historically, the Invesco ETF has been a strong investment to hold on to. When dividends are included, its total returns over the past decade totaled 417%, which equates to a CAGR of 17.9%. Of course, that doesn’t mean he’ll generate those kinds of returns over the next two decades, but it’s an indicator of the strength of the growth stocks he holds in his portfolio and their ability to generate massive returns. Even at a slower growth rate, the fund has the potential to make you a millionaire with a $25,000 investment, as long as you’re willing to be patient and wait for the long haul.

Invesco QQQ Trust is an excellent option for any investor

Whether you’re looking for growth stocks or just want a diversified portfolio, the QQQ fund can be a great investment to add to your own holdings. It has a fairly low expense ratio of 0.2%, and with exposure to top growth stocks, it’s a no-doubt investment that can be suitable for almost any type of investor. It can also be a great default investment to put money into, especially if you don’t want to track individual stocks.