Selecting individual stocks can be rewarding for investors, but it can also be a time-consuming and stressful process. Ideally, investors should also diversify their portfolios across a wide range of stocks so as not to put all their eggs in one basket.

For investors who don’t have time to buy individual stocks, exchange traded funds (ETFs) are an easy way to build a diversified portfolio. ETFs contain baskets of stocks that reflect specific themes or trends and can be actively traded throughout the day. This distinguishes them from mutual funds, which can only be traded once a day.

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Conservative investors could stick with such an ETF Vanguard S&P 500 ETF (VOO -0.43%)which passively tracks the S&P 500. However, more growth-oriented investors can invest in the Invesco QQQ Trust (QQQ -0.49%)that haunts the tech-heavy Nasdaq 100. Over the past 10 years, QQQ grew at a compound annual growth rate (CAGR) of 11.02%, outperforming the S&P 500’s CAGR of 5.3%. Past performance is no guarantee of future profits, but QQQ could potentially continue to grow, turning monthly investments of $1,000 into more than $213,000 over the next 10 years.

What does the QQQ ETF actually own?

The QQQ ETF passively tracks the Nasdaq 100. His five largest holdings are currently Apple (9% of his assets), Microsoft (7.8%), Nvidia (7.6%), Broadcom (6.4%) and Amazon (5.5%). This makes it a great way to invest in the broader technology sector without being overly dependent on a single company.

Almost 60% of QQQ stocks are in the technology sector. Another 18% comes from the consumer discretionary sector, 6% from healthcare stocks, and the rest is spread across other sectors. Over the last 10 years, the QQQ ETF delivered a total return of 437%. Over the same period, the more diversified S&P 500 only delivered a total return of 243%.

The QQQ ETF charges an expense ratio of 0.2%, meaning that $20 is automatically deducted from every $10,000 investment. That’s much higher than the Vanguard S&P 500 ETF’s expense ratio of 0.03%, but is comparable to other ETFs that bundle higher-growth stocks. So if you believe the Nasdaq 100 will continue to outperform the S&P 500, the QQQ ETF could be a stress-free way to get ahead of the market.

How can QQQ turn $1,000 in monthly investments into $213,000?

It is impossible to say exactly where the Nasdaq 100 will develop in the long term. However, for this theoretical forecast, let’s assume that it continues to grow at a compound annual growth rate of 11% over the next 10 years. If you invest $1,000 in QQQ today and invest another $1,000 every month regardless of the trading price, your stake would grow to $213,430 in a decade.

You would have only contributed $121,000 through your monthly investments, but the magic of compounding would have generated $92,430 in additional profits. Using a disciplined dollar-cost averaging approach with planned $1,000 investments would also have allowed you to buy more shares when the market swooned and fewer shares when the market recovered.

But assuming you have $121,000 in cash left over, you could make an even bigger profit with a lump sum purchase. Assuming the QQQ grows at an annual rate of 11% over the next 10 years, your initial investment would rise to about $345,000.

However, either approach could help you benefit from the growth of the Nasdaq 100 and beat the S&P 500 over the long term. The key is to remain patient, tune out any short-term noise, and avoid withdrawing too early if you don’t need the money immediately.