Finder’s investment experts compared 57 growth ETFs. We selected nine of the best — three large-cap, three mid-cap and three small-cap — that had the optimal combination of high YTD return, high one-year return and low expense ratio.
Growth ETFs are composed of stocks with massive growth potential. In most cases, growth stocks are technology companies but you’ll find businesses from other sectors as well. As opposed to income stocks where you can earn a high passive income from dividends, growth stocks pay fewer dividends but have a higher stock price growth potential.
If you’re looking to invest in growth stocks but you don’t want to do the stock-picking yourself, investing in a growth ETF could be a better option. The only downside is that you’ll have to pay an annual fee as a percentage of your invested funds to the ETF. The fee is marked as “Expense ratio.”
A free way to invest in most equities.
| Available asset types | Stocks, Options, ETFs, Cryptocurrency |
|---|---|
| Stock trade fee | $0 |
| Option trade fee | $0 |
| Annual fee | 0% |
The Vanguard Growth ETF is a passive, full-replication ETF of the CRSP US Large Cap Growth Index. The index tracks the large-cap stocks listed on the NYSE, AMEX, ARCA and Nasdaq.
Full replication means the ETF’s price moves exactly the same as the CRSP index. The Vanguard Growth ETF’s largest holdings are Alphabet, Amazon, Apple, Facebook, Home Depot, Mastercard, Microsoft, Nvidia, Tesla and Visa.
The Invesco QQQ Trust is a passive ETF that closely tracks the Nasdaq-100 index. This index tracks the largest 100 nonfinancial companies listed on the Nasdaq exchange.
Because the QQQ ETF tracks this index, it holds all 100 stocks in most cases. Its largest holdings include Alphabet, Amazon, Apple, Comcast, Facebook, Microsoft, Nvidia, PayPal and Tesla.
The iShares Russell 1000 Growth ETF is a passive ETF that tracks the Russell 1000 Growth Index. This index tracks the top 1,000 stocks of the Russel 3,000 index. These 1,000 stocks represent 90% of the market cap in the 3,000 index.
Even though the index tracks 1,000 companies, the iShares Russell 1000 Growth ETF owns around 450 companies. Its largest holdings include Apple, Microsoft, Amazon, Alphabet, Facebook, Tesla, Nvidia, Visa and UnitedHealth Group.
The Vanguard Mid-Cap Growth Index Fund ETF is a passive, full-replication ETF of the CRSP US Mid Cap Growth Index. The index tracks the mid-cap stocks listed on the NYSE, AMEX, ARCA and Nasdaq. The largest holdings of this Vanguard growth ETF include Amphenol, Chipotle Mexican Grill, Digital Realty Trust, DocuSign, IDEXX Laboratories, IHS Markit Ltd, IQVIA Holdings, Match Group, Microchip Technology and Veeva Systems.
The iShares S&P Mid-Cap 400 Growth ETF is a passive ETF that tracks the S&P MidCap 400(R) Growth Index. Despite the index tracking 400 companies, the ETF only owns around 220. Its largest holdings are Amphenol, Chipotle Mexican Grill, Digital Realty Trust, DocuSign, IDEXX Laboratories, IHS Markit Ltd., IQVIA Holdings, Match Group, Microchip Technology, Veeva Systems
The SPDR® S&P Kensho New Economies Composite ETF is a passive ETF that tracks the S&P Kensho New Economies Composite Index. This index comprises US-listed securities of US companies and foreign companies registered in the developed and emerging markets worldwide.
Both the index and the ETF own 405 companies with the biggest holdings in the fund being 3D Systems Corporation, Ambarella, Avis Budget Group, Blink Charging Co., General Motors Company, MicroVision, Riot Blockchain, Tesla and Vuzix Corporation.
The Vanguard Small-Cap Growth ETF is a passive ETF that tracks the CRSP US Small Cap Growth Index. This index measures the investment return of small-capitalization growth stocks listed on the NYSE, AMEX, ARCA and Nasdaq. This Vanguard growth ETF owns around 650 stocks, with the biggest holdings being Avantor, Bio-Techne, Charles River Laboratories International, Entegris, Fair Isaac Corp, Guardant Health, Novocure, Pool Corp, PTC Inc., and Teledyne Technologies.
The iShares Russell 2000 Growth ETF passively tracks the Russell 2000 Growth Index, which consists of the 2,000 smallest companies in the Russell 3000 Index. The ETF itself owns around 1,140 stocks from the index. Its major holdings are Caesars Entertainment, RH, Plug Power, Deckers Outdoor, Siteone Landscape Supply, Churchill Downs, Louisiana Pacific, Arrowhead Pharmaceuticals, Yeti Holdings and Ultragenyx Pharmaceutical.
The iShares S&P Small-Cap 600 Growth ETF is a passively-managed ETF that tracks the S&P SmallCap 600 Index. This index tracks companies that have had a market cap of between $700 million and $3.2 billion when they were listed in the index. The ETF, however, owns around 350 stocks from the index, with the major holdings being Crocs, Saia, Omnicell, Chart Industries, Exponent, Power Integrations, Balchem, Neogenomics, Ensign Group and Gamestop.
Growth ETFs are a great way to add multiple companies with high growth potential into your investment portfolio. In most cases, you’ll also get passive income in the form of dividends but not at the same rate as you would with value ETFs.
Keep in mind, ETFs have an annual fee in the form of a percentage of your invested funds. You can avoid this by picking stocks yourself.
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