Best Growth ETFs

Growth ETFs are a broad category of funds that includes stocks from companies with the greatest capacity for quick growth and profit increases. If you’re looking to add a boost to your portfolio, investing in this type of ETF can be an excellent way to take advantage of market volatility. But which ones are worth your investment?

Today, we’ll take a look at a few of the best growth ETFs right now. We’ll also introduce you to some of our favorite brokers to help you get started investing online. 

Quick Look at the Best Growth ETFs:

• Invesco QSQQ
• iShares Russell 1000 Growth ETF
• Vanguard Growth ETF

Growth ETFs Biggest Gainers and Losers

Which of these ETFs shows the highest volatility? These are the top-moving ETFs on the market today. 

Premarket Growth ETFs

Prefer to do your trading in the premarket? These growth ETFs are making movements before the official market opening bell. 

Aftermarket Growth ETFs

The aftermarket hours can also be one of the best times to invest. These growth ETFs are some ETFs to consider in today’s aftermarket trading session. 

Why Invest in Growth ETFs?

With so many investment choices available, why should you invest in growth ETFs? Let’s take a look at some of the biggest benefits that come with investing in this asset class.

• Growth ETFs have the potential for high returns. One of the key features of growth ETFs is that they have a high potential for returns. When a fund manager puts together a growth ETF, he or she only selects stocks that have high return potential. While every growth ETF won’t always skyrocket in price, growth ETFs have a much higher potential for profit when compared to value ETFs.
• Growth ETFs are much safer than investing in individual stocks. If you have the risk tolerance to invest in growth ETFs over value ETFs or total market index funds, why not invest in individual companies or penny stocks? Growth ETFs can provide you with the volatility necessary to see large price increases without the risk of investing in individual stocks.
  
  When you invest in a growth ETF, you invest in a basket of companies instead of 1 individual corporation. If you purchase stock in an individual company and that company goes bankrupt, you could lose 100% of your initial investment. However, when you invest in a growth ETF, you split your investments between many companies. If a company has a poor season or goes bankrupt, you won’t lose all of the money you’ve invested.

• Growth ETFs can amplify returns during a bull market. A bull market is a type of market trend during which prices of stocks and ETFs are rising or expected to rise. During a bull market, you might see a small increase in price if you invest in value ETFs or index funds. Growth ETFs, on the other hand, tend to see huge price increases during a bull market. If you think that prices are set to rise soon, investing in growth ETFs can be a better value for your dollar. 

3 Growth ETFs by AUM

Ready to add a growth ETF to your portfolio? Let’s take a look at the 3 largest ETFs by assets under management (AUM).   

1. Invesco QQQ (QQQ)

The Invesco QQQ is one of the world’s most widely purchased growth ETFs on the market with over $79,000 million in assets under management (AUM). The QQQ ETF aims to track the NASDAQ 100 index, which means that the ETF is heavily invested in the technology sectors. You’ll probably recognize most of the fund’s included assets — major holdings include the Microsoft Corporation (MSFT), Apple (AAPL), Amazon (AMZN), Facebook (FB) and Alphabet, the company that owns Google.

The Invesco QQQ contains relatively few stocks when compared to other growth-oriented ETFs, with about 1/3 of its total assets held in its 3 largest investments and only 100 stocks included in total. This can make the ETF especially volatile and is primarily held by short-term traders looking to capitalize on quick market movements. However, QQQ also has an exceptionally low expense ratio of 0.20% and has a history dating back to 1999. This can make it an equally appealing candidate for long-term traders looking to add tech sector exposure to their portfolio. 

2. iShares Russell 1000 Growth ETF (IWF)

The iShares Russell 1000 Growth ETF tracks the Russell 1000 Growth Index, which offers exposure to large-cap companies with a high potential for growth. Most of the fund’s holdings are similar to QQQ, with major investments in Microsoft Corporation, Apple, Amazon and Facebook. IWF currently has over $41,000 million in AUM.

Unlike QQQ, IWF includes a little over 600 stocks in its composition and offers a greater level of diversification. Though the fund is still heavily weighted toward technology and the tech sector, industrials, energy and consumer goods also receive a good amount of representation. Major nontech holdings include Visa, UnitedHealth Group, Mastercard and Cisco. This can make IWF a safer long-term hold than more concentrated funds like QQQ.  

3. Vanguard Growth ETF (VUG)

The Vanguard Growth ETF tracks the MSCI U.S. Prime Market Growth Index, which is another index fund focused on tracking the prices of growth-oriented companies. VUG currently holds a little over $39,500 million AUM and is heavily oriented toward the tech and consumer goods sectors. Some of the fund’s largest holdings are in the Microsoft Corporation, Apple and Amazon. The fund’s largest non-tech holdings are in Visa, Mastercard, Home Depot and the McDonald’s Corporation.

VUG currently contains a little over 400 individual stocks in its fund, which can make it an appealing choice for long-term investors. Another appealing benefit of VUG is its rock-bottom expense ratio. Like most choices from Vanguard, the Vanguard Growth ETF focuses on low expenses — and at just 0.04%, it’s an appealing choice for both bargain hunters and long-term investors. 

Best Online Brokers for ETFs

Before you can invest in a growth ETF, you need to open a brokerage account. Thankfully, there are plenty of online brokers offering quick signups — let’s take a look at a few of our favorites.   

Enhancing Your Portfolio with Growth ETFs

Growth ETFs can be an excellent complement to any investment portfolio. However, it’s important to remember that these ETFs can be exceptionally volatile — and they shouldn’t make up the majority of your portfolio. Invest in a strong foundation of value ETFs and index funds before you start investing in growth ETFs to protect your financial future. 

Frequently Asked Questions