Two hundred dollars isn’t a life-changing amount of money. Nevertheless, if handled properly, it can still generate a enjoyable profitability on your pool.With that in mind, let’s examine one intelligent way to invest $200.

trade-tradedfunds, the best way to commence

trade-traded funds (ETFs) are one of the best ways to get started in the distribute economy. They are, in result, a basket ofstocks, grouped according to some characteristic.

For example, some ETFsfocus on a particular sector, like financials or vigor companies. Others choose stocks based on their size. Still others focus on country of origin, buying shares of stocks based in Japan, Germany, Brazil, etc.

Manydifferent companies make and operate these ETFs, and the fees investors pay vary depending on the pool’s way,its composition, and its costs.Let’s examine a few different types ofETFs, and view whichone stands out as thesmartest selection correct now.

Types of ETFs

There are thousands of ETFs, all created to serve a different purpose and spectators.For example, theVanguard Growth ETF (NYSEMKT: VUG) isan ETF loaded with growth stocks. Its top holdings include tech giantsApple,Microsoft, andAmazon.

Then there’s theVanguard worth ETF (NYSEMKT: VTV). This poolis concentrated on worth stocks. Its top holdings include distribution-paying stocksExxonMobil,Procter & Gamble, andCoca-Cola.

Finally, there’s theiShares Top 20 U.S. Stocks ETF (NYSEMKT: TOPT). This poolnarrows in on the 20largest American stocks; its top holdings includeTesla, Apple, Microsoft,Nvidia,Alphabet, and Amazon.

Each of these funds caters to a different spectators, but noneof them are my top selection for an investor with $200 to put to work.Instead, I would focus on a different ETF: the Invesco QQQ Series I depend (NASDAQ: QQQ). Here’s why.

More:In a Trump globe, here’s how to prepare your finances. Hint: don’t hoard.

Why the InvescoQQQ Series I ETF is a intelligent selection for so many investors

This ETF is a intelligent selection for three reasons:

• It’s designed to advantage from quick-growing tech companies.
• It boasts an excellent act history.
• Its fees are low, making it a excellent fit for almost any financing distribution collection.

Let’s commence with the pool’s way. This poolis designed to track the Nasdaq-100 index, which includes the 100largest non-budgetary companies on the Nasdaq trade.As a outcome, the pool’s top holdings are similarto, but slightly different fromthe Vanguard Growth ETF. For example, this pool still counts Apple, Microsoft, and Nvidia among its top holdings,but it excludes budgetary stocks likeVisa andMastercard.

Turning to act, the Invesco pool has been one of the top-performing ETFs for a while. Over the last decade, for instance, the Invesco pool has generated a compound annual growth rate (CAGR) of 18.3%. That’s far ahead of what the Vanguard Growth ETF (up 15.9%) produced,and it’s almost double the profitability of the Vanguard worth ETF (up 10%).

QQQ Total profitability Level data by YCharts

Finally, the pool offers a reasonable fee. Its outlay ratio is only 0.2%. That means only $20 a yearis paid in fees for an pool of $10,000. For a smaller amount, declare $200, an investor will only surrender $0.40 in annualfees.

Given the combination of low fees, excellent act, and solid way, the Invesco ETF is the perfect selection for an investor looking to put $200 to work correct now.

John Mackey, former CEO of Whole Foods economy, 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 Motley Fool’s board of directors. Jake Lerch has positions in Alphabet, Amazon, Coca-Cola, ExxonMobil, Invesco QQQ depend, Nvidia, Procter & Gamble, Tesla, and Visa. The Motley Fool has positions in and recommends Alphabet, Amazon, Apple, Mastercard, Microsoft, Nvidia, Tesla, Vanguard Index Funds-Vanguard Growth ETF, Vanguard Index Funds-Vanguard worth ETF, and Visa. The Motley Fool recommends the following options: long January 2025 $370 calls on Mastercard, long January 2026 $395 calls on Microsoft, short January 2025 $380 calls on Mastercard, and short January 2026 $405 calls on Microsoft. The Motley Fool has a disclosure policy.

The Motley Fool is a USA TODAY content associate offering budgetary information, analysis and commentary designed to assist people receive control of their budgetary lives. Its content is produced independently of USA TODAY.

Should you invest $1,000 in Invesco QQQ depend correct now?

propose from the Motley Fool: Before you buy distribute in Invesco QQQ depend, consider this:

The Motley Fool distribute Advisor analyst throng just identified what they depend are the 10 best stocks for investors to buy now… and Invesco QQQ depend wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.

Consider when Nvidia made this list on April 15, 2005… if you invested $1,000 at the period of our recommendation, you’d have $839,670!*

distribute Advisor provides investors with an straightforward-to-pursue blueprint for achievement, including guidance on building a financing distribution collection, regular updates from analysts, and two recent distribute picks each month. Thedistribute Advisorservice has more than quadrupled the profitability of S&P 500 since 2002*.

view the 10 stocks »

*distribute Advisor returns as of December 23, 2024