Investing in an exchange-traded fund (ETF) can be a good way to minimize your overall risk. With stock valuations high, investors may be concerned (and rightfully so) that a correction may be around the corner. Putting money into an ETF can help spread out some of that risk.
One ETF which has normally been a good buy for investors is the BMO Nasdaq 100 Equity Hedged to CAD Index ETF (TSX:ZQQ). It gives Canadian investors exposure to the Nasdaq 100 index and the top growth stocks in the world. Last year, the ETF rose by 24%, delivering fantastic returns, benefitting from yet another strong year on the markets.
In 2025, however, there are question marks about whether many top Nasdaq stocks could be overpriced, and thus, be bad buys. There is going to be some risk for investors here, especially with Apple (NASDAQ:AAPL), Nvidia (NASDAQ:NVDA), and Microsoft (NASDAQ:MSFT) all being the top three stocks in the index and all of them being highly dependent on artificial intelligence-related spending, but in the long run the ETF can still make for a good investment to hang on to. The fund has delivered returns of around 125% over the past five years.
Trying to time the market can be difficult and while there may be a slowdown for tech stocks in the near future, investing in the top growth companies in the world is generally a good strategy for the long haul. Although 2025 may not be as great of a year for this ETF as 2024 was, it can still be a good move to add the fund to your portfolio.