One suggested alternative is the Invesco Nasdaq 100 ETF, which launched in 2020. This ETF mirrors the same trading rules as QQQ but charges a lower expense ratio of 0.15%, compared to QQQ’s 0.2%. Although it has lower trading volume than QQQ, making it potentially less liquid, long-term investors willing to hold their investments may find this option more cost-effective. The lower fees could lead to greater returns over time, since they reduce the overall cost of investing.
For those looking for further diversification, the Direxion Nasdaq-100 Equal Weighted Index ETF is another viable choice. Instead of concentrating investments in a handful of dominant companies, this ETF invests an equal amount in each of the 100 components of the Nasdaq-100 index. The diversity in investments can provide better growth potential, particularly since smaller companies may have more room to expand. Additionally, the Vanguard Total Stock Market ETF provides an even broader market exposure while encompassing some of the big tech stocks like the Magnificent Seven, with an exceptionally low expense ratio of just 0.03%. This blend of diversification and lower fees positions these ETFs as attractive alternatives for investors looking for a well-rounded approach to stock market investing.
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