Investing in growth stocks can produce substantial returns for your portfolio. But picking individual stocks isn't for everyone. Growth stocks are generally harder to evaluate because their valuations are based largely on their long-term potential, which creates a lot of uncertainty for investors.
Six growth ETFs
Six best growth ETFs in 2025
Many investors interested in growth stocks could benefit from investing in growth exchange-traded funds (ETFs). A growth ETF is a fund that will invest in a large basket of growth stocks. That gives investors exposure to the types of investments with massive potential for big capital returns without needing to analyze individual companies. Here are six growth ETFs to consider.
| Fund Name | Ticker | Expense Ratio | Net Assets |
|---|---|---|---|
| Vanguard Growth ETF | (NYSEMKT:VUG) | 0.04% | $324.3 billion |
| Vanguard Mega-Cap Growth ETF | (NYSEMKT:MGK) | 0.07% | $28.7 billion |
| iShares Russell Mid-Cap Growth ETF | (NYSEMKT:IWP) | 0.23% | $20.2 billion |
| Vanguard Small-Cap Growth ETF | (NYSEMKT:VBK) | 0.07% | $37.5 billion |
| iShares MSCI EAFE Growth ETF | (NYSEMKT:EFG) | 0.36% | $12.6 billion |
| ARK Innovation ETF | (NYSEMKT:ARKK) | 0.75% | $8 billion |
ETFs 1 - 3
1. Vanguard Growth ETF
The Vanguard Growth ETF (VUG -0.2%) is a large-cap growth stock ETF. The fund aims to replicate the CRSP U.S. Large Cap Growth Index, which constitutes half of the CRSP U.S. Large Cap Index. The latter comprises the top 85% of U.S. stocks weighted by market capitalization, which includes companies with market caps as small as $2.1 billion. So, while the index is primarily comprised of large-cap stocks, it also includes some mid-cap stocks.
While weighting the fund by market capitalization keeps fees and asset turnover low, it results in heavy allocations toward the market's biggest companies. The three largest holdings account for more than 34% of the portfolio. Likewise, over 60% of the portfolio is invested in technology companies.
With an expense ratio of just 0.04%, the Vanguard Growth ETF is one of the most efficient ways to gain additional exposure to growth stocks in your portfolio.
2. Vanguard Mega-Cap Growth ETF
For those who believe the big winners will keep winning, the Vanguard Mega-Cap Growth ETF (MGK -0.03%) may be a good option to add growth stocks to your portfolio.
The ETF tracks the CRSP U.S. Mega Cap Growth Index, which is based on the CRSP US Mega Cap Index. The latter collects stocks in the top 70% of market capitalization.
The smaller stock universe means the Vanguard Mega-Cap Growth ETF is even more concentrated in the biggest names in the stock market. The top 10 holdings account for more than two-thirds of the portfolio.
It's even more heavily weighted toward technology growth stocks than the Vanguard Growth ETF. Despite the smaller index, Vanguard manages to keep its asset turnover roughly the same as the Vanguard Growth ETF.
If you'd like greater exposure to the biggest growth stocks in the market, the Vanguard Mega-Cap Growth ETF has a very low expense ratio of just 0.07%.
3. iShares Russell Mid-Cap Growth ETF
Mid-cap stocks may offer more room for capital appreciation without taking on the risk of small-cap stocks. For those looking to strike a balance, the iShares Russell Mid-Cap Growth ETF (IWP 0.0%) may be for you.
The ETF tracks the Russell Midcap Growth Index, which tracks half of the mid-cap market with strong earnings-growth expectations and high price-to-book ratios. The mid-cap index comprises the smallest 800 stocks within the Russell 1000 Index.
The iShares Russell Mid-Cap Growth ETF holds a much more diversified portfolio than its large- and mega-cap counterparts. The top 10 holdings typically account for about 15% to 20% of the portfolio. Consumer discretionary stocks account for the biggest portion of the portfolio, but still make up less than 25% of the index. Technology and Industrial stocks are the next biggest sectors represented in the ETF.
The nature of the smaller companies in the index leads to greater turnover, but management keeps turnover relatively low for a mid-cap growth index fund. If you want to diversify away from the big tech names that dominate growth stocks, the iShares Russell Mid-Cap Growth ETF is a good option.
ETFs 4 - 6
4. Vanguard Small-Cap Growth ETF
Small-cap growth stocks offer the biggest potential for capital appreciation. Since they're small companies, it takes relatively little increased buying interest to move the stocks significantly higher. The Vanguard Small-Cap Growth ETF (VBK 0.07%) offers a simple way to gain exposure to this sector without having to dig for individual stocks.
The ETF tracks the CRSP U.S. Small Cap Growth Index, which selects the top 50% of stocks with the best earnings growth outlooks and strong returns on assets from the universe of stocks that fall within the second through 15th percentile based on market cap.
The size of the index, combined with the relative parity in size of its components, makes this small-cap growth ETF much more diversified than its peers investing in larger companies. Investors looking for more small caps should consider the Vanguard Small-Cap Growth ETF.
5. iShares MSCI EAFE Growth ETF
Some of the biggest growth opportunities are in international markets. The iShares MSCI EAFE Growth ETF (EFG 0.02%) provides exposure to growth stocks in developed markets outside of the U.S. and Canada.
The ETF tracks the MSCI EAFE Growth Index, which includes large- and mid-cap companies based outside the U.S. and Canada. The stocks are filtered based on earnings growth history and outlook.
The ETF is more diversified than its U.S. Large Cap Growth counterparts. A little less than 20% of the portfolio is invested in the top 10 holdings. The index includes companies from Japan, the U.K., France, Switzerland, Germany, and others.
If you're looking for additional international stock exposure in your portfolio, the iShares MSCI EAFE Growth ETF is a great option.
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6. ARK Innovation ETF
Cathie Wood's ARK Funds rose to prominence in 2020 when shares of the ETF more than doubled. However, shares faltered in 2021 and 2022 and languished through mid-2024. At that point, Ark's strategy of investing in innovative growth companies started to outperform once again.
The ARK Innovation ETF (ARKK -0.42%) is an actively managed fund that invests in companies producing what it deems "disruptive innovation." The team defines the term as "the introduction of a technologically enabled new product or service that potentially changes the way the world works."
It invests across industries, including biotechnology, automotive, energy, information technology, and finance. Although it maintains a global outlook, it's heavily concentrated in the U.S., with more than 90% of the portfolio held in stocks of North American companies.
About 55% of the ETF's portfolio remains invested in its top 10 holdings since Wood often lets its winners run and isn't afraid of betting big on her highest-conviction stock picks. For example, Tesla (TSLA -0.78%) accounts for almost 11% of the portfolio.
As an actively managed ETF, the ARK Innovation ETF has a relatively high expense ratio of 0.75%. However, if you believe in Wood and her team's ability to find the most innovative companies and manage a portfolio for optimal long-term growth, it's worth the price.
FAQ
Growth ETFs FAQ
Does Vanguard have a growth ETF?
Yes, Vanguard offers multiple growth ETFs. Its most popular is the Vanguard Growth ETF, which invests in a broad group of U.S. large-cap growth stocks. It also offers growth ETFs that track small-cap, mid-cap, and mega-cap growth stocks, international growth stocks, and funds that track other large-cap growth stock indexes.
Is S&P 500 a growth ETF?
An S&P 500 ETF isn't strictly invested in growth stocks. It tracks the exact makeup of the S&P 500, which is composed of 500 of the largest profitable U.S. companies. Currently, the index is heavily weighted toward growth stocks due to the influence of the world's largest companies. However, that's not always the case.
Are growth ETFs suitable for long-term or short-term investing?
Growth ETFs can be used in short-term investment strategies, but most investors will find them more valuable as long-term buy-and-hold investments. Growth stocks are more volatile than average, which means the short-term results can be more unpredictable. In the long run, however, large-cap growth stocks have outperformed the market historically.
How do growth ETFs perform during market downturns?
Growth ETFs tend to underperform during market downturns, while value stocks tend to hold up better. Due to their high valuations, any decline in investor expectations can have a much bigger impact on growth stock prices. The recovery can take years, but large-cap growth stocks historically outperform over the long run.
What sectors are commonly found in growth ETFs?
Growth ETFs are generally heavily weighted toward information technology and communication services stocks.
