Best Growth ETFs for 2017 and Beyond

Growth stock ETFs can allow you to profit from rapidly-growing companies while diversifying your risk.

Growth stocks are generally defined as the stocks of companies growing at faster-than-average rates, and they can be exciting and lucrative investments. Growth stocks have the potential for high returns, but they also tend to be relatively volatile. Exchange-traded funds, or ETFs, like these four can help you take advantage of growth investing without the risks involved with choosing individual stocks.

Fund Name Symbol Expense Ratio Dividend Yield 5-Year Average Total Return
Schwab U.S. Large-Cap Growth ETF SCHG 0.04% 1.21% 16.2%
Vanguard Mid-Cap Growth Index Fund ETF VOT 0.07% 0.78% 14%
Vanguard Small-Cap Growth Index Fund ETF VBK 0.07% 1.01% 13.5%
iShares MSCI EAFE Growth ETF EFG 0.40% 3.06% 10.1%


Schwab U.S. Large-Cap Growth ETF

The Schwab U.S. Large-Cap Growth ETF (NYSEMKT:SCHG) has the lowest expense ratio of any major growth ETF as of this writing, with fees totaling just $4 for every $10,000 you have invested. The fund tracks the Dow Jones U.S. Large-Cap Growth Total Stock Market Index, which, as the name implies, is composed of larger growth stocks. To give you an idea of what this means, top holdings include AppleAmazon.comFacebook, and Berkshire Hathaway.


Vanguard Mid-Cap Growth Index Fund ETF

Generally speaking, the larger a growth stock is, the less volatile you can expect it to be. Conversely, smaller growth stocks tend to have higher return potential. So, a mid-cap growth ETF like the Vanguard Mid-Cap Growth Index Fund ETF (NYSEMKT:VOT) can be a good compromise. Mid-cap stocks are typically considered to be those with market capitalizations between $2 billion and $10 billion, and examples of some of the well-known growth stocks among this ETF’s top holdings are Electronic ArtsFiserv, and Autodesk.

Vanguard Small-Cap Growth Index Fund ETF

As I mentioned, smaller stocks tend to have more volatility. However, large-cap ETFs like the Schwab fund I discussed tend to be more top-heavy, since some large-cap stocks are very large. In fact, Apple makes up 7.3% of the large-cap fund’s assets. Meanwhile, no stock owned by the Vanguard Small-Cap Growth Index Fund ETF (NYSEMKT:VBK) makes up more than 0.7% of the fund’s total assets, and this diversification helps mitigate the inherent volatility that comes with smaller companies. Although no stocks are what I would call “big” holdings, top stocks owned by the fund include Domino’s PizzaVail Resorts, and Align Technology.

iShares MSCI EAFE Growth ETF

There are several good reasons to add foreign stocks to your portfolio. Just to name a couple of examples, foreign stocks can be a hedge against currency fluctuations, and emerging markets can have some exciting growth opportunities. The iShares MSCI EAFE Growth ETF (NYSEMKT:EFG)can help you get exposure to foreign growth stocks. While the fund does invest in companies all over the world, the majority are large-cap stocks in developed countries. Just to name a few examples, the fund’s top holdings include several companies that are familiar to most Americans, such as NestleBayerAnheuser-Busch InBev, and Diageo.

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Matthew Frankel owns shares of Apple and Berkshire Hathaway (B shares). The Motley Fool owns shares of and recommends Align Technology, Amazon, Apple, Berkshire Hathaway (B shares), Facebook, and Nestle. The Motley Fool recommends Diageo, Electronic Arts, and Vail Resorts. The Motley Fool has a disclosure policy.

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Drew Limsky

Drew Limsky



Drew Limsky joined Lifestyle Media Group in August 2020 as Editor-in-Chief of South Florida Business & Wealth. His first issue of SFBW, October 2020, heralded a reimagined structure, with new content categories and a slew of fresh visual themes. “As sort of a cross between Forbes and Robb Report, with a dash of GQ and Vogue,” Limsky says, “SFBW reflects South Florida’s increasingly sophisticated and dynamic business and cultural landscape.”

Limsky, an avid traveler, swimmer and film buff who holds a law degree and Ph.D. from New York University, likes to say, “I’m a doctor, but I can’t operate—except on your brand.” He wrote his dissertation on the nonfiction work of Joan Didion. Prior to that, Limsky received his B.A. in English, summa cum laude, from Emory University and earned his M.A. in literature at American University in connection with a Masters Scholar Award fellowship.

Limsky came to SFBW at the apex of a storied career in journalism and publishing that includes six previous lead editorial roles, including for some of the world’s best-known brands. He served as global editor-in-chief of Lexus magazine, founding editor-in-chief of custom lifestyle magazines for Cadillac and Holland America Line, and was the founding editor-in-chief of Modern Luxury Interiors South Florida. He also was the executive editor for B2B magazines for Acura and Honda Financial Services, and he served as travel editor for Conde Nast. Magazines under Limsky’s editorship have garnered more than 75 industry awards.

He has also written for many of the country’s top newspapers and magazines, including The New York Times, Washington Post, Los Angeles Times, Miami Herald, Boston Globe, USA Today, Worth, Robb Report, Afar, Time Out New York, National Geographic Traveler, Men’s Journal, Ritz-Carlton, Elite Traveler, Florida Design, Metropolis and Architectural Digest Mexico. His other clients have included Four Seasons, Acqualina Resort & Residences, Yahoo!, American Airlines, Wynn, Douglas Elliman and Corcoran. As an adjunct assistant professor, Limsky has taught journalism, film and creative writing at the City University of New York, Pace University, American University and other colleges.