Best Growth ETFs

Best Growth ETFs

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What to look for in a growth ETF

Before buying any ETF, it’s useful to have some key information about the fund so that you can compare the investment opportunity against others. Here are some key things to pay attention to: Long-term track record – Probably the best guide to what the fund could make in the future is what the fund has made in the past. Review five- and ten-year track records to see if returns have been maintained over time. Of course, past performance is no guarantee of future results. Diversification – How diversified is the growth ETF? Does it own companies across a variety of sectors or largely just among ? More could help reduce your risk and provide greater safety for your investment. Expense ratio – The is how much you’ll pay annually to own the fund, expressed as a percentage of your invested assets. That’s money that comes out of your return. Larger funds generally have lower expense ratios than smaller funds. Fund holdings – Take a peek at the fund’s top holdings and see if it really aligns with what a growth fund should be. The holdings should broadly match up with the fund’s investment objective. Every growth fund is different. Here are some of the top growth ETFs to consider for your portfolio. (Data as of April 14, 2022.)

Best growth ETFs

iShares Russell Top 200 Growth ETF IWY

This fund tracks an index of large-cap U.S. growth stocks and has strong five- and ten-year track records. Although it has more than 100 holdings, the ETF tends to be quite concentrated in high-quality tech stocks, such as Apple, and Microsoft. 5-year returns (annualized): 21.3 percent Expense ratio: 0.20 percent Dividend yield: 0.6 percent

Invesco S&P 500 GARP ETF SPGP

This fund is based on the S&P 500 Growth at a Reasonable Price Index, which includes about 75 stocks in the S&P 500 that score well on growth, quality and value. The fund has performed strongly over the last five years and has some diversification across , information technology, and industrials. 5-year returns (annualized): 20.8 percent Expense ratio: 0.36 percent Dividend yield: 0.7 percent

Schwab U S Large-Cap Growth ETF SCHG

This ETF shows that you can get great performance even while paying rock-bottom costs. SCHG tracks the Dow Jones U.S. Large-Cap Growth Total Stock Market Index. This fund is concentrated in information technology stocks such as and has sizable investments in communications, health care and consumer discretionary stocks, too. 5-year returns (annualized): 19.6 percent Expense ratio: 0.04 percent Dividend yield: 0.4 percent

Vanguard Russell 1000 Growth ETF VONG

This ETF invests in stocks comprising the Russell 1000 Growth Index, which is composed of large U.S. growth companies, and seeks to track the return of that index. The fund is heavily concentrated in information technology, consumer discretionary and industrials. The long-term returns have been excellent whether over the last five year or ten years. 5-year returns (annualized): 20.1 percent Expense ratio: 0.08 percent Dividend yield: 0.6 percent

Vanguard Mega Cap Growth ETF MGK

This fund from a low-cost leader aims to track the CRSP U.S. Mega Cap Growth Index, which includes the largest publicly traded U.S. stocks. The fund is heavily concentrated in information technology and consumer discretionary stocks, with Apple, Amazon and Microsoft sitting near the top of its holdings. 5-year returns (annualized): 19.4 percent Expense ratio: 0.07 percent Dividend yield: 0.5 percent

iShares Russell 1000 Growth ETF IWF

With hundreds of stocks in its stable, this iShares ETF is looking to track the results of an index composed of large- and mid-cap growth stocks. It’s delivered outstanding returns over time, and it includes some of the largest publicly traded companies including Apple, Alphabet and Nvidia. 5-year returns (annualized): 20.0 percent Expense ratio: 0.19 percent Dividend yield: 0.5 percent

SPDR Portfolio S&P 500 Growth ETF SPYG

Another fund with rock-bottom costs, this ETF focuses on large-cap growth stocks in the S&P 500 Growth Index, which includes the strongest-growth stocks among the S&P 500. This ETF seeks to track the performance of the growth index, and its holdings include Apple, Amazon, , and Alphabet. 5-year returns (annualized): 18.6 percent Expense ratio: 0.04 percent Dividend yield: 0.7 percent

Bottom line

ETFs offer an easy way for investors to purchase growth stocks without having to do that comes with buying individual stocks yourself. By taking advantage of these funds, you’ll minimize many of the headaches that come with investing and are still likely to enjoy strong returns over time with some of the market’s hottest performers. It’s hard to beat that combination.

Learn more

Editorial Disclaimer: All investors are advised to conduct their own independent research into investment strategies before making an investment decision. In addition, investors are advised that past investment product performance is no guarantee of future price appreciation. SHARE: Bankrate senior reporter James F. Royal, Ph.D., covers investing and wealth management. His work has been cited by CNBC, the Washington Post, The New York Times and more. Brian Beers is the managing editor for the Wealth team at Bankrate. He oversees editorial coverage of banking, investing, the economy and all things money.

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