10 High Growth ETFs to Watch in 2023

Key highlights:

• Growth ETFs offer investors interested in growth investing an opportunity to invest in high-growth stocks across various sectors, including technology, healthcare, and consumer discretionary.
• These ETFs have historically performed well, outpacing other types of ETFs, such as value ETFs, due to their focus on companies with strong earnings and revenue growth potential.
• Investing in growth exchange-traded funds can be a convenient way to diversify your portfolio and potentially generate higher returns, while also providing exposure to innovative and disruptive companies that are shaping the future of their respective industries.

What should you look for in a growth ETF?

When selecting a growth ETF (Exchange-Traded Fund), here are some important factors to consider:

• Fund objective: Make sure the fund's investment objective aligns with your investment goals. A growth ETF invests in stocks that are expected to grow at a faster rate than the broader market. So, if your investment goal is to achieve long-term capital appreciation, then a growth ETF could be a suitable choice.
• Investment strategy: Look at the fund's investment strategy to ensure it's consistent with your investment style. Some growth ETFs invest in growth-oriented sectors, such as technology and healthcare, while others may focus on growth stocks with strong earnings growth and revenue growth.
• Portfolio composition: Check the fund's holdings to see what types of stocks it invests in and whether they align with your investment objectives. Make sure the ETF has a diversified portfolio with exposure to multiple sectors, industries, and companies to reduce risk.
• Expense ratio: Look at the ETF's expense ratio, which is the annual fee charged by the fund. Lower expense ratios are generally better, as they reduce the impact of fees on your investment returns.
• Performance history: Evaluate the fund's past performance to see how it has performed over different market conditions. Keep in mind that past performance is not a guarantee of future results, but it can provide insight into how the fund is likely to perform in the future.
• Liquidity: Make sure the ETF has sufficient trading volume and liquidity, so you can easily buy and sell shares without significant price disruptions.

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💡Related: Discover growth stocks on the ASX→

Here are the high growth ETFs to watch

Data as of 29 March 2023.

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Discover some of the top growth ETFs on Stake

1. Invesco QQQ ETF ($QQQ)

Market capitalisation: US$164.37b

Stock price (as of 29/03/2023): US$312.72

Stake platform bought / sold (1 Jan 2023 - 24 Mar 2023): 72% / 28%

The Invesco QQQ Trust tracks the NASDAQ-100 Index, which includes 100 of the largest non-financial companies listed on the NASDAQ stock exchange. The ETF focuses heavily on the technology sector and is popular with investors seeking exposure to high-growth stocks. Pros include strong historical performance and exposure to innovative companies, but cons include high volatility and a concentration of holdings in tech stocks and a few large companies.

🆚 Compare QQQ vs VUG→

🆚 Compare QQQ vs VGT→

2. Vanguard Growth ETF ($VUG)

Market capitalisation: US$78.47b

Stock price (as of 29/03/2023): US$243.07

Stake platform bought / sold (1 Jan 2023 - 24 Mar 2023): 72% / 28%

The Vanguard Growth ETF seeks to track the performance of the CRSP US Large Cap Growth Index, which includes large-cap US companies with strong earnings and revenue growth potential. The ETF invests across multiple sectors, with a focus on technology, healthcare, and consumer discretionary companies. Pros include a low expense ratio and diversified exposure, but cons include a concentration of holdings in a few large companies.

3. iShares Core S&P MidCap ETF ($IJH)

Market capitalisation: US$64.08b

Stock price (as of 29/03/2023): US$245.14

Stake platform bought / sold (1 Jan 2023 - 24 Mar 2023): Not available

The iShares Core S&P MidCap ETF tracks the S&P MidCap 400 Index, which includes mid-cap US-listed companies. The ETF provides exposure to companies with strong growth potential that may not be included in the larger-cap indices. Pros include exposure to companies with strong growth potential and broad diversification across multiple sectors, but cons include lower liquidity and greater volatility than larger-cap ETFs.

4. iShares Russell 1000 Growth ETF ($IWF)

Market capitalisation: US$61.04b

Stock price (as of 29/03/2023): US$238.70

Stake platform bought / sold (1 Jan 2023 - 24 Mar 2023): Not available

The iShares Russell 1000 Growth ETF tracks the Russell 1000 Growth Index, which includes US large-cap growth stocks. The ETF invests in companies with strong earnings and revenue growth potential across multiple sectors, with a focus on technology and healthcare. Pros include exposure to high-growth stock and diversified sector exposure, but cons include a concentration of holdings in a few large companies.

🆚 Compare IWF vs VUG→

5. Vanguard Information Technology ETF ($VGT)

Market capitalisation: US$45.19b

Stock price (as of 29/03/2023): US$375.52

Stake platform bought / sold (1 Jan 2023 - 24 Mar 2023): 68% / 32%

The Vanguard Information Technology ETF seeks to track the performance of the MSCI US Investable Market Information Technology 25/50 Index, which includes US technology companies. The ETF invests across multiple sub-sectors of the technology industry, including software, hardware, and semiconductors. Pros include exposure to the rapidly growing technology sector and diversification across multiple sub-sectors, but cons include higher volatility and concentration of holdings in a few large companies.

6. iShares S&P 500 Growth ETF ($IVW)

Market capitalisation: US$28.97b

Stock price (as of 29/03/2023): US$62.58

Stake platform bought / sold (1 Jan 2023 - 24 Mar 2023): Not available

The iShares S&P 500 Growth ETF tracks the S&P 500 Growth Index, which includes US large-cap growth stocks. The ETF invests across multiple sectors, with a focus on technology, healthcare, and consumer discretionary companies. Pros include exposure to many large cap stocks and high-growth stocks and diversified sector exposure, but cons include a concentration of holdings in a few large companies.

7. Schwab U.S. Large-Cap Growth ETF ($SCHG)

Market capitalisation: US$15.57b

Stock price (as of 29/03/2023): US$63.54

Stake platform bought / sold (1 Jan 2023 - 24 Mar 2023): 76% / 24%

The Schwab U.S. Large-Cap Growth ETF seeks to track the performance of the Dow Jones U.S. Large-Cap Growth Total Stock Market Index, which includes US large-cap growth companies. The ETF invests across multiple sectors, with a focus on technology, healthcare, and consumer discretionary companies. Pros include low expense ratio and diversified sector exposure, but cons include a concentration of holdings in a few large companies.

🆚 Compare SCHG vs QQQ→

🆚 Compare SCHG vs SPYG→

8. SPDR Portfolio S&P 500 Growth ETF ($SPYG)

Market capitalisation: US$15.22b

Stock price (as of 29/03/2023): US$54.22

Stake platform bought / sold (1 Jan 2023 - 24 Mar 2023): 73% / 27%

The SPDR Portfolio S&P 500 Growth ETF tracks the S&P 500 Growth Index, which includes US large-cap growth companies. The ETF invests across multiple sectors, with a focus on technology, healthcare, and consumer discretionary companies. Pros include low expense ratio and diversified sector exposure, but cons include a concentration of holdings in a few large companies.

9. Vanguard Small Cap Growth ETF ($VBK)

Market capitalisation: US$12.60b

Stock price (as of 29/03/2023): US$211.36

Stake platform bought / sold (1 Jan 2023 - 24 Mar 2023): Not available

The Vanguard Small-Cap Growth ETF seeks to track the performance of the CRSP US Small Cap Growth Index, which includes US small-cap growth companies. The ETF invests across multiple sectors, with a focus on technology, healthcare, and industrials. Pros include exposure to high-growth companies and diversified sector exposure, but cons include higher volatility due to the focus on small-cap growth-oriented companies and concentration risk, as the top holdings account for a significant percentage of the overall portfolio.

10. iShares MSCI EAFE Growth ETF ($EFG)

Market capitalisation: US$12.27b

Stock price (as of 29/03/2023): US$91.98

Stake platform bought / sold (1 Jan 2023 - 24 Mar 2023): Not available

The iShares MSCI EAFE Growth ETF seeks to track the performance of the MSCI EAFE Growth Index, which includes large and mid-cap companies in developed markets outside of North America. The ETF invests across multiple sectors, with a focus on technology, healthcare, and consumer discretionary companies. Pros include exposure to high-growth companies in developed international markets and diversified sector exposure in emerging markets, but cons include a concentration of holdings in a few large companies and potential currency risks.

💡Related: Are these the best emerging markets ETFs on the ASX?→

Which ETF has had the best 10-year return?

The SPDR S&P Semiconductor ETF ($XSD) has performed best over the last 10-years with a return of +700% to its investors from January 2013 to March 2023, beating other non-leveraged ETFs.

The SPDR S&P Semiconductor ETF ($XSD) invests in companies in the semiconductor industry, which includes the design, manufacture, and sale of integrated circuits and other electronic components. The ETF provides exposure to companies across various market capitalisations and invests in both domestic and international semiconductor companies. The pros of investing in XSD include exposure to a rapidly growing industry with potential for high growth and diversification across multiple companies.

However, the cons include a high degree of volatility due to the cyclical nature of the semiconductor industry and concentration risk, as the top holdings of the ETF account for a significant percentage of the overall portfolio.

Check out our other articles on some of the best U.S. ETFs that are being traded on Stake.

Which growth ETF on the ASX is popular with Stake investors?

One popular growth ETF from the ASX among Stake investors is the Betashares Diversified High Growth ($DHHF). The Betashares Diversified High Growth ETF ($DHHF) is an Australian ETF that provides investors with exposure to a diversified portfolio of global growth assets.

The ETF invests in other Betashares ETFs, including those that track global equities, fixed-income securities, and gold, providing investors with exposure to multiple asset classes in a single investment. The pros of investing in DHHF include diversification across multiple asset classes, low management fees, and ease of access to a diversified portfolio of global growth assets.

However, the cons include exposure to currency risk, as the ETF invests in assets denominated in multiple currencies, and the potential for higher volatility due to the focus on growth-oriented assets.

Which growth ETF from Wall St is popular with Stake investors?

The iShares Core U.S. Growth ETF ($IUSG) is a popular growth ETF among Stake Wall St investors. The iShares Core S&P U.S. Growth ETF ($IUSG) seeks to track the performance of the S&P 900 Growth Index, which includes large, mid, and small-cap U.S. companies with strong growth potential.

The ETF invests across multiple sectors, with a focus on technology, healthcare, and consumer discretionary companies. The pros of investing in IUSG include exposure to a diversified portfolio of growth stocks across different market capitalisations, low expense ratio, and potential for long-term capital appreciation.

However, the cons include concentration risk, as the top holdings account for a significant percentage of the overall portfolio, and higher volatility due to the focus on growth-oriented companies.

Are growth ETFs a good investment?

Whether growth ETFs are a good investment depends on several factors, including an investor's investment objectives, risk tolerance, and investment horizon. Here are some things to consider when evaluating growth ETFs as an investment:

• Investment objectives: Growth ETFs can be a good fit for investors seeking long-term capital appreciation. These ETFs typically invest in stocks with strong earnings and revenue growth potential. If your investment objective is long-term growth, then a growth ETF may be a good fit for your portfolio.
• Risk tolerance: Growth ETFs are generally considered riskier than value ETFs because they invest in companies with higher valuations and future earnings potential. Therefore, investors with a lower risk tolerance may want to consider a more diversified portfolio, including a mix of growth and value ETFs.
• Investment horizon: Growth ETFs tend to perform well over the long term but can be more volatile in the short term. Investors should have a long-term investment horizon and be willing to ride out short-term market fluctuations.
• Expense ratios: Like all ETFs, growth ETFs charge a management fee or expense ratio. These fees can impact your returns over time, so it's important to evaluate the expense ratio of any ETF you're considering.
• Market conditions: Growth ETFs tend to perform well in a bullish market, while value ETFs tend to perform better in a bearish market. Therefore, it's important to consider the current market conditions and your expectations for future market performance.

In conclusion, growth ETFs can be a good investment for investors with a long-term investment horizon, a high risk tolerance, and a focus on capital appreciation.

This does not constitute financial product advice nor a recommendation to invest in the securities listed. Past performance is not a reliable indicator of future performance. As always, do your own research and consider seeking appropriate financial or taxation advice before investing.