This 1 ETF Turned $10,000 Into $97,000 Over the Past Decade — and It’s Still Quietly Outperforming
Investing in the stock market is one of the most effortless ways to build wealth, but the right investment is key. Exchange-traded funds (ETFs) are passive investments that perform best over time, helping generate substantial returns with minimal effort.
Tech stocks have been particularly lucrative over the past few years, and tech-focused ETFs are reaping the rewards. In fact, the iShares U.S. Technology ETF (IYW +0.61%) has earned total returns of 865% over the past decade, as of this writing. But is it still a smart buy?
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Tech ETFs are having a moment
Tech has dominated the market in recent months, from the high-profile SpaceX IPO to Micron Technology‘s staggering 760% total returns over the past year. With OpenAI and Anthropic also filing to go public, it doesn’t appear investors’ appetite for tech is slowing.
Tech ETFs are well positioned to benefit 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 on AI. If any corner of the tech industry thrives, this ETF stands to benefit.
Over the past 10 years alone, this ETF has more than doubled the performance of the S&P 500 (^GSPC +0.50%), turning a $10,000 investment into close to $97,000.
Close to half of the ETF’s portfolio is allocated to semiconductor stocks, which have been fueling much of the fund’s growth lately. Because semiconductors play a significant role in AI development, this ETF could have even greater growth potential if AI continues to thrive.
The downside of a tech ETF
ETFs can provide extra diversification if you buy just individual stocks, but that can be both a positive and a negative at times.
If one or two stocks falter, the drawdown may not be as severe when you’re investing in an ETF with more than 100 stocks. At the same time, though, if one or two stocks earn lucrative returns, an ETF generally won’t experience the same upswing, since each stock makes up only a fraction of the overall portfolio.
Micron Technology, for example, makes up just over 5% of the iShares U.S. Technology ETF. While this ETF has capitalized on Micron’s tremendous gains over the last year, it’s still significantly underperformed the stock itself.
IYW Total Return Level data by YCharts
Investing in ETFs can be a smart way to gain exposure to hundreds of stocks at once, making them ideal for hands-off investors looking for a “set it and forget it” approach. They may not be as lucrative as a portfolio of hand-picked stocks, but for some investors, that’s a worthwhile trade-off.
As with any investment, a long-term outlook is key. Tech stocks can be incredibly volatile in the short term, and no healthy investment will make you rich overnight. But with the right strategy, the iShares U.S. Technology ETF could help you build long-term wealth.
