Billionaires Are Piling Into This AI Index Fund—Turn $500/Month Into $432K?
Wall Street's elite are quietly loading up on an AI-focused index fund—and the math is eye-popping. A $500 monthly drip could balloon to $432,300 if historical returns hold. We dug into the hype.
Why the smart money's betting big
Forget picking individual AI stocks—this fund bundles the sector's heavy hitters into one trade. Billionaires love the diversification play, even if the expense ratio stings like a hedge fund management fee.
The compounding paradox
That $432K projection assumes perfect conditions: no market crashes, no AI winters, and definitely no SEC investigations into index fund rebalancing shenanigans. But hey—past performance is totally a guarantee, right?
Last word: If it sounds too good to be true... it probably is. But in this market? Everyone's chasing the same algorithmically-generated rainbow.
Image source: Getty Images.
The Invesco QQQ Trust is heavily invested in technology companies likely to benefit from artificial intelligence
The Invesco QQQ Trust measures the performance of the, an index that tracks the 100 largest nonfinancial companies listed on the Nasdaq Stock Exchange. The ETF has more than 60% of its assets invested in technology stocks, many of which are likely to benefit as the artificial intelligence (AI) revolution continues to unfold.
The 10 largest holdings in the Invesco QQQ Trust are listed by weight below:
AI spending across hardware, software, and services is forecast to grow at 35.9% annually through 2030, according to Grand View Research. Several companies listed above should benefit.
Amazon, Microsoft, and Alphabet are the three largest public cloud providers, meaning demand for AI infrastructure should be a tailwind. And Nvidia is the undisputed leader in data center GPUs, the most popular type of AI accelerator.
Apple has introduced generative AI capabilities for iPhones. Meta Platforms is leaning on AI to increase user engagement across its social media platforms and improve outcomes for advertisers.
Netflix recently started using generative AI to create content for movies and shows. Broadcom is the market leader in AI networking chips and custom AI accelerators, and Tesla recently launched an autonomous ride-hailing service.
History says the Invesco QQQ Trust can turn $500 invested monthly into $432,300 in 20 years
Excluding dividends, the Invesco QQQ Trust advanced 1,340% during the last two decades, which is equivalent to 14% annually. Including dividends, the index fund achieved a total return of 1,560%, compounding at 15% annually. I will assume a more modest return of 12% annually to introduce a margin of safety.
At that pace, $500 invested monthly in the fund WOULD be worth $105,200 in one decade and $432,300 in two decades. Some investors may prefer to save more or less each month, so the chart below shows how different contribution amounts would grow over time, assuming annual returns of 12%.
|
10 Years |
$42,100 |
$84,200 |
$126,300 |
|
20 Years |
$172,900 |
$345,800 |
$518,700 |
Returns were determined using the investor.gov compound interest calculator.
Investors need two more pieces of information. First, the Invesco QQQ Trust has been very volatile in the past due to its heavy exposure to technology stocks. The index fund fell more than 12% from its record high seven times in the last decade. Similar volatility is likely in the future.
Second, the ETF has an expense ratio of 0.2%, meaning shareholders will pay $20 per year on every $10,000 invested. Comparatively, the average expense ratio on U.S. index funds and mutual funds was 0.34% in 2024.
