Growth/momentum stocks, even those in the large- and mega-cap spaces, can deliver impressive short-term gains, but the “story stock” label isn’t accrued overnight. Even if a growth stock doesn’t attain life-changing status, it can still take some time for big returns to build up.
That is to say, smart investors often take the long view of growth investing — an objective made easier with exchange traded funds such as the Invesco QQQ Trust (QQQ) and the Invesco NASDAQ 100 ETF (QQQM).
Between the pair, which have identical lineups, QQQM is highly relevant to patient, buy-and-hold investors because its annual fee of 0.15%, or $15 on a $10,000 investment, is five basis points below that of its older counterpart QQQ. Both ETFs follow the Nasdaq-100 Index (NDX), which has long been heavier on growth stocks than other broad gauges of domestic equities.
While the ETFs hold just 101 stocks apiece, several of those names qualify as potentially compelling long-term growth ideas.
QQQ, QQQM Rosters Packed With Opportunity
With contributions from a variety of industries, QQQ and QQQM are homes to several names that are among Morningstar’s 10 best growth stocks for the long term. That group includes software maker Autodesk (NASDAQ: ADSK).
“The company’s balance sheet is sound, and we think management has done an exceptional job with its internal investment strategy. Though recent results fell short of target because of persistent macroeconomic headwinds, we view the headwinds as transitory,” noted Morningstar’s Susan Dziubinski.
Intuit (NASDAQ: INTU), the company behind QuickBooks and TurboTax, among other widely recognized business and personal finance tools, is a QQQ/QQQM holding with quality and wide moat traits that also fits the bill as a growth stock with strong long-term prospects.
“The company benefits from significant switching costs in both the small-business/self-employed segment and in its consumer segment, says Morningstar’s Bhusal Sharma,” added Dziubinski.
Perhaps not surprising to experienced growth investors and those familiar with QQQ or QQQM, Microsoft (NASDAQ: MSFT) is also on Morningstar’s list of 10 best growth stocks for the long haul. That’s pertinent because the tech giant is the largest holding in the Invesco ETFs, commanding 13.33% of the funds’ rosters.
Among QQQ and QQQM holdings with solid growth credentials that some investors may not be familiar with, there’s semiconductor equipment maker ASML Holding (NASDAQ: ASML).
“We think the management team maintains a sound balance sheet and delivers attractive distributions to shareholders—and its investments have been topnotch, too. First-quarter results were solid, thanks to strong lithography demand,” concluded Dziubinski.
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