Growth exchange-traded funds (ETFs) are composed of stocks with massive growth potential. 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. The only downside is that you’ll have to pay an annual fee as a percentage of your invested funds to the ETF which is called the “expense ratio.”
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Here are the best growth ETFs from small cap, mid cap and large cap companies that have the optimal combination of YTD returns and 0.25% or lower expense ratios. No currency hedged, leveraged or inverse ETFs are included.
| Logo | ETF name and ticker | ETF description | Expense ratio | YTD return | Market Cap |
|---|---|---|---|---|---|
 | iShares Morningstar Small-Cap Growth ETF (ISCG) | ISCG is an iShares ETF that tracks the Morningstar Small-Cap Growth Index, offering exposure to small-cap growth stocks. | 0.06% | 0.68% | Small cap |
 | IQ US Mid Cap R&D Leaders ETF (MRND) | MRND is an ETF by IQ Global that invests in US mid-cap stocks with a focus on research and development. | 0.16% | 2.97% | Mid cap |
 | Technology Select Sector SPDR Fund (XLK) | XLK is an exchange-traded fund that seeks to track the performance of the technology sector within the S&P 500 Index. | 0.10% | 32.65% | Large cap |
What Matt thinks about investing in growth ETFs
Investing in growth ETFs is an efficient way to gain exposure to companies that are expected to grow quicker than the overall market — think NVIDIA (NVDA), Netflix (NFLX) and Tesla (TSLA) — without poring over countless individual stocks. Growth ETFs may help minimize some of the risks of investing in individual growth stocks, like increased volatility, by offering safety through diversification.
— Matt Miczulski, Editor, Investments.
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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