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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Best growth ETFs of 2024
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.
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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.
According to our analysis as of October, 2023, the top growth ETFs are:
Small cap: iShares Morningstar Small-Cap Growth ETF (ISCG)
Mid cap: IQ US Mid Cap R&D Leaders ET (MRND)
Large cap: Invesco QQQ Trust Series I (QQQ)
So far, Invesco QQQ Trust Series I (QQQ) is the best growth ETF this year based on YTD price change.
Yes, growth ETFs are a great way to diversify your portfolio and manage risk. 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.”
Bottom line
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.
Kliment Dukovski was a personal finance writer at Finder, specializing in investments and cryptocurrency. He's written more than 700 articles to help readers compare the best trading platforms, understand complex investment terms and find the best credit cards for their needs. His expert commentary has been featured in such digital publications as Fox Business, MSN Money and MediaFeed. He’s also well-versed in money transfers, home loans and more — breaking down these topics into simple concepts anyone can understand. In another life, Kliment ghostwrote guides and articles on foreign exchange, stock market trading and cryptocurrencies. See full bio
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