This 1 ETF Turned $10,000 Into $97,000 Over the Past Decade -- and It's Still Quietly Outperforming

Investing successful the banal marketplace is 1 of the astir effortless ways to physique wealth, but the close concern is key. Exchange-traded funds (ETFs) are passive investments that execute champion implicit time, helping make important returns with minimal effort.

Tech stocks person been peculiarly lucrative implicit the past fewer years, and tech-focused ETFs are reaping the rewards. In fact, the iShares U.S. Technology ETF (NYSEMKT: IYW) has earned full returns of 865% implicit the past decade, arsenic of this writing. But is it inactive a astute buy?

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Tech ETFs are having a infinitesimal

Tech has dominated the marketplace successful caller months, from the high-profile SpaceX IPO to Micron Technology's staggering 760% full returns implicit the past year. With OpenAI and Anthropic besides filing to spell public, it doesn't look investors' appetite for tech is slowing.

Tech ETFs are good positioned to payment from that excitement. The iShares U.S. Technology ETF tracks the broader tech sector, holding everything from industry-leading giants to the hottest semiconductor stocks to companies capitalizing connected AI. If immoderate country of the tech manufacture thrives, this ETF stands to benefit.

Over the past 10 years alone, this ETF has much than doubled the show of the S&P 500 (SNPINDEX: ^GSPC), turning a $10,000 concern into adjacent to $97,000.

Close to fractional of the ETF's portfolio is allocated to semiconductor stocks, which person been fueling overmuch of the fund's maturation lately. Because semiconductors play a important relation successful AI development, this ETF could person adjacent greater maturation imaginable if AI continues to thrive.

The downside of a tech ETF

ETFs tin supply other diversification if you bargain conscionable idiosyncratic stocks, but that tin beryllium some a affirmative and a antagonistic astatine times.

If 1 oregon 2 stocks falter, the drawdown whitethorn not beryllium arsenic terrible erstwhile you're investing successful an ETF with much than 100 stocks. At the aforesaid time, though, if 1 oregon 2 stocks gain lucrative returns, an ETF mostly won't acquisition the aforesaid upswing, since each banal makes up lone a fraction of the wide portfolio.

Micron Technology, for example, makes up conscionable implicit 5% of the iShares U.S. Technology ETF. While this ETF has capitalized connected Micron's tremendous gains implicit the past year, it's inactive importantly underperformed the banal itself.

Investing successful ETFs tin beryllium a astute mode to summation vulnerability to hundreds of stocks astatine once, making them perfect for hands-off investors looking for a "set it and hide it" approach. They whitethorn not beryllium arsenic lucrative arsenic a portfolio of hand-picked stocks, but for immoderate investors, that's a worthwhile trade-off.