When it comes to investing for your retirement, you might assume that you have two main choices: investing in individual stocks, some of which might grow very briskly, or investing in a broad-market index fund, which will deliver roughly the same return as the index it tracks. (Yes, you might also invest in actively managed mutual funds, but the bulk of them underperform their index counterparts over long periods, so let's ignore them for this article.)

There's another alternative to consider, though: exchange-traded funds (ETFs), which are funds that can be traded like stocks and often track indexes. Here's a look at one ETF that might help grow your assets for retirement -- along with a related one that you might also consider.

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Meet the QQQ

The Invesco QQQ Trust (NASDAQ:QQQ) is an ETF that tracks the Nasdaq-100 Index, which is composed of the 100 largest non-financial companies that trade on the Nasdaq market. As you might imagine, it's rather heavily weighted towards technology companies, though it omits the big ones that trade on the New York Stock Exchange, such as Salesforce.com (NYSE:CRM), IBM (NYSE:IBM) and Oracle (NYSE:ORCL).

As an index fund, it sports a low annual fee -- 0.20%. Considering that many non-index mutual funds charge 1% or more, this is a terrifically low fee (though some index funds charge even less). Low fees mean that you get to keep most of the fund's gains, instead of handing over a meaningful chunk to the fund company.

QQQ holdings

Here are the fund's top 10 holdings, as of early March 2021:

Company

Percent of ETF's Assets

Apple 

11.44%

Microsoft

9.44%

Amazon.com 

8.31%

Tesla 

4.44%

Alphabet Class C

3.62%

Facebook

3.35%

Alphabet 

3.28%

NVIDIA 

2.75%

PayPal 

2.57%

Intel (NASDAQ:INTC)

2.07%

Data source: Morningstar.com. 

With names like that in its roster, you might suspect that the fund has a good track record -- and you'd be right. Invesco notes that the ETF has been rated the best performer among large-cap growth funds, citing Lipper total return stats as of Dec. 31, 2020.

The QQQ ETF is terrific if you'd like to own chunks of roughly a hundred companies like the ones above, but understand that most of your investment will be in just four companies: Apple, Microsoft, Amazon.com, and Google parent Alphabet. Together those companies represent about 36% of the fund's value. If the 10th-largest holding represents just 2.07%, you can imagine that not too much of your money will be in holdings 99 or 100. Still, the oversized holdings are in companies that have been growing like gangbusters in recent years and may well keep doing so.

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Image source: Getty Images.

A smaller alternative: the QQQJ

If you like the idea of the QQQ for your long-term portfolio but you'd also like some exposure to smaller companies, consider parking some of your money in the Invesco NASDAQ Next Gen 100 ETF (NASDAQ:QQQJ).

As the fund company explains, the ETF "is based on the NASDAQ Next Generation 100 Index (Index) [and invests] at least 90% of its total assets in the securities that comprise the Index by investing in the 101st to the 200th largest companies on the NASDAQ." So it's chock-full of large-cap and mid-cap non-financial companies, including many with a technology focus. Here's a recent list of its top holdings:

Company

Percent of ETF's Assets

Roku 

2.69%

CrowdStrike 

2.41%

ViacomCBS

2.21%

The Trade Desk

2.02%

Etsy 

1.79%

Zscaler 

1.65%

Fortinet 

1.63%

Zebra Technologies 

1.62%

DraftKings 

1.57%

Old Dominion Freight Line 

1.50%

Data source: Morningstar.com. 

One thing to note is that this fund is far less concentrated in its top holdings. Its annual fee is also a bit lower, at 0.15%.

Most of the companies in both top-10 lists have performed very strongly over the past year or so, leading some to worry that they may be overvalued and are more likely to retract a bit in the near future than keep surging. No one can know what any stock will do in the short term, so these funds are best thought of as long-term portfolio candidates. And if you're worried about possible overvaluation, you might opt to just park some of your available money in them now, and reserve some money to buy additional shares later when they may be priced lower.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.