If you don’t want to invest in individual growth stocks, these ETFs could be worth a second look.
Growth exchange-traded funds (ETFs) broadly focus on companies that are expected to grow their earnings and revenue at an above-average rate compared to the overall market. This can provide long-term investors the potential for significant capital appreciation over the long term, but it’s always important to be selective about where you put your money to work.
By holding a basket of numerous growth stocks across various sectors (such as technology, healthcare, and consumer stocks), investing in growth ETFs can allow you to spread risk more effectively than investing in a single stock or a few individual growth stocks. These ETFs also offer you as the investor a streamlined way to invest in companies at the forefront of innovation and emerging trends without needing to perform extensive research and analysis on individual companies.
On that note, if you have $5,000 to invest, here are three top growth ETFs to consider putting some or all of that amount into the next time you go stock shopping.
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1. Vanguard Growth ETF
Vanguard Growth ETF (VUG +0.50%) is an ETF that tracks the CRSP US Large Cap Growth Index and focuses on large U.S. companies, primarily in technology and consumer cyclical businesses. The fund has an extremely low expense ratio of 0.04%.
The ETF has generated strong average annual returns of approximately 17.4% over the past 10 years. If those returns were to continue in the next decade, this means that a $5,000 investment in the Vanguard Growth ETF could grow to more than $24,000 by the end of that forecast period.
Vanguard Index Funds – Vanguard Growth ETF
Today’s Change
(0.50%) $2.46
Current Price
$490.84
Key Data Points
Market Cap
$0B
Day’s Range
$488.63 – $490.84
52wk Range
$316.14 – $505.38
Volume
429K
Avg Vol
0
Gross Margin
0.00%
Dividend Yield
N/A
The ETF holds 160 stocks, with the largest holdings, including megacap companies like Apple, Microsoft, and Nvidia. Other holdings include Eli Lilly, Mastercard, Oracle, and Uber.
For investors who want exposure to large-cap growth companies with high sales and earnings growth potential without investing in individual stocks, the Vanguard Growth ETF could be well worth considering.
2. Invesco QQQ Trust
Invesco QQQ Trust (QQQ +0.81%) tracks the Nasdaq-100 index, which includes the 100 largest nonfinancial companies on the Nasdaq exchange. The ETF is heavily weighted toward the technology sector, but it also includes stocks in the consumer discretionary and healthcare sectors, which could be of interest to investors seeking additional diversification. Its expense ratio is 0.20%.
The ETF also provides investors exposure to companies at the forefront of long-term trends like artificial intelligence (AI), cloud computing, and robotics. Top holdings of the Invesco QQQ Trust include Nvidia, Apple, Microsoft, Broadcom, Amazon, Alphabet, and Tesla. However, you’ll also find companies like Costco, Netflix, Intuitive Surgical, and PepsiCo among its various holdings.
Today’s Change
(0.81%) $4.98
Current Price
$619.25
Key Data Points
Market Cap
$0B
Day’s Range
$615.42 – $619.32
52wk Range
$402.39 – $637.01
Volume
23M
Avg Vol
0
Gross Margin
0.00%
Dividend Yield
N/A
Over the last decade, the Invesco QQQ Trust has outperformed the S&P 500 (^GSPC +0.54%) by a significant margin, with total returns of around 456% for the former versus approximately 276% for the latter. If you break that down to an annualized return over the last 10 years, the Invesco QQQ Trust has delivered 19.6% compared to the market‘s 14.6%. Were that track record to continue, a $5,000 investment in QQQ now could be worth more than $29,000 in a decade.
3. Schwab U.S. Large-Cap Growth ETF
Schwab U.S. Large-Cap Growth ETF (SCHG +0.52%) boasts a low expense ratio (0.04%) and tracks the Dow Jones U.S. Large-Cap Growth Total Stock Market Index. The fund is concentrated in megacap stocks. Its top holdings, including Nvidia, Microsoft, Apple, Amazon, and Broadcom, account for around half of the ETF’s total assets.
Schwab Strategic Trust – Schwab U.s. Large-Cap Growth ETF
Today’s Change
(0.52%) $0.17
Current Price
$32.80
Key Data Points
Market Cap
$0B
Day’s Range
$32.65 – $32.81
52wk Range
$21.37 – $33.74
Volume
4.3M
Avg Vol
0
Gross Margin
0.00%
Dividend Yield
N/A
However, if you invest in this ETF you’ll also get exposure to other companies, including names like Walt Disney, GE Vernova, and Booking Holdings. The ETF currently holds 197 stocks.
The Schwab U.S. Large-Cap Growth ETF boasts a 10-year annualized return of 18.18% based on its market price at the time of this writing. So, a $5,000 investment in this ETF with a hypothetical annualized performance of 18.18% over a decade — assuming annual compounding and no additional contributions or withdrawals — would be worth more than $26,000 at the end of that period.
Rachel Warren has positions in Alphabet, Amazon, and Apple. The Motley Fool has positions in and recommends Alphabet, Amazon, Apple, Booking Holdings, Costco Wholesale, Intuitive Surgical, Mastercard, Microsoft, Netflix, Nvidia, Oracle, Tesla, Uber Technologies, Vanguard Index Funds – Vanguard Growth ETF, and Walt Disney. The Motley Fool recommends Broadcom and Ge Vernova and recommends the following options: long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft. The Motley Fool has a disclosure policy.