Exchange-traded funds offer a convenient way to invest in sectors or niches that interest you. If you expect growth stocks to keep growing briskly in the coming years, the Vanguard Growth
ETFs often sport lower expense ratios than their mutual fund cousins. The Growth ETF's expense ratio -- its annual fee -- is a very low 0.14%. And while the typical growth stock prefers to plow excess cash into further growth instead of paying out dividends, this ETF offers a dividend, albeit a modest one, yielding 1.1%.
The Vanguard Growth ETF doesn't have the longest track record, but over the past five years, it has outpaced the S&P 500. As with most investments, we can't expect outstanding performance in every quarter or year. Investors with conviction need to wait for their holdings to deliver. With a relatively low turnover rate of 26%, this fund isn't frantically and frequently rejiggering its holdings, as many funds do.
What's in it?
The ETF contains roughly 430 growers from among the MSCI U.S. Prime Market 750 Index of large-cap companies. Several of its components made strong contributions to its performance over the past year. Freeport McMoRan Copper & Gold
Other companies didn't add much to the ETF's returns last year, but could have an effect in the years to come. Cisco Systems
The big picture
Growing companies are what fuel stock market returns. A well-chosen ETF can grant you instant diversification across a range of large growers -- and make investing in and profiting from the sector that much easier.
Keep your eye on these investments by adding them to your watchlist:
- Add Vanguard Growth ETF to My Watchlist.
- Add Freeport McMorRan Copper & Gold to My Watchlist.
- Add EMC to My Watchlist.
- Add Cisco Systems to My Watchlist.
- Add Ford to My Watchlist.
- Add Philip Morris International to My Watchlist.
ETFs can help you find the way to better investing results. To find some great ETF investing ideas, take a look at The Motley Fool's special free report, " 3 ETFs Set to Soar During the Recovery ."
Longtime Fool contributor Selena Maranjian does not own shares of any companies mentioned in this article. Ford is a Motley Fool Stock Advisor choice. Philip Morris International is a Motley Fool Global Gains recommendation. The Fool has created a bull call spread position on Cisco Systems, and it owns shares of EMC, Ford, and Philip Morris International. Alpha Newsletter Account, LLC owns shares of Cisco Systems. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.