5 best growth ETFs to buy for Q4 2024
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Growth investing has outperformed value investing for the past few years and buying ETFs in this sector is an easy way to ride the current trend. In this beginner friendly guide, our expert analysts have selected the best growth ETFs for the coming year.
What are the top growth ETFs to buy?
Copy link to sectionIn the table below you can see a list of the top ETFs as selected by our experts. You’ll find their ticker symbol together with their names. Continue scrolling lower to learn more about each one and find out why they have made our list.
| # | ETF symbol | ETF name | Where to Trade |
|---|---|---|---|
| 1 | SCHG | Schwab U.S. Large-cap growth ETF | Buy SCHG Buy or sell stock CFDs with Plus500. 82% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you can afford to take the high risk of losing your money. |
| 2 | SPYG | SPDR Portfolio S&P 500 Growth ETF | Buy SPYG Buy or sell stock CFDs with Plus500. 82% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you can afford to take the high risk of losing your money. |
| 3 | IUSG | iShares Core S&P Growth ETF | Buy IUSG Buy or sell stock CFDs with Plus500. 82% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you can afford to take the high risk of losing your money. |
| 4 | MDYG | SPDR S&P 400 Mid Cap Growth ETF | Buy MDYG Buy or sell stock CFDs with Plus500. 82% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you can afford to take the high risk of losing your money. |
| 5 | IWO | iShares Russell 2000 Growth ETF | Buy IWO Buy or sell stock CFDs with Plus500. 82% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you can afford to take the high risk of losing your money. |
1. Schwab U.S. Large-cap growth ETF (NYSEARCA:SCHG)
Copy link to sectionSCHG invests in large-cap U.S based companies that exhibit growth style characteristics. It tracks the Dow Jones U.S. large-cap growth total market index and uses several metrics to classify growth stocks. The fund heavily favors the technology industry where almost half of its stocks come from.
Communication services, consumer discretionary, and healthcare are three other industries the fund allocates part of its money to. Some of the largest companies in the world are held by SCHG including Apple, Microsoft, and Amazon, which are its top three technology stocks. Half of the fund is contained within its top ten holdings and its top two account for just over 20% of its total portfolio.
Since its inception in 2009, it’s been a top performer and has grown by over 500% in the decade since. Although it invests in some of the world’s leading growth companies, it’s worth noting that half of its holdings are within one sector, and 20% of it is dedicated to two stocks. Any downturn in the tech industry and wider equity market could potentially negatively impact the fund’s performance.
82% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you can afford to take the high risk of losing your money.
2. SPDR Portfolio S&P 500 Growth ETF (NYSEARCA: SPYG)
Copy link to sectionSecond spot on our list goes to SPYG which offers exposure to S&P 500 companies that display the strongest growth characteristics. The characteristics are based on sales growth, earnings change, and momentum. The fund tracks the S&P 500 growth index and is made up of over 200 U.S based companies.
Similar to the Schwab above, SPDR invests in a range of industries but has its strongest weighting in the technology sector, where over 40% of its stocks belong. A further 40% of its holdings are split between the consumer discretionary, communications, and healthcare sectors.
Its largest three holdings are Apple, Microsoft, and Amazon which amount to almost 30% of the total fund. It’s been a slow moving ETF and since its inception in 2001, it has grown in value by over 200%, although 100% of that came during the coronavirus pandemic. As it’s heavily weighted towards a single industry (technology stocks), its overall performance is impacted by any moves in the technology sector.
82% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you can afford to take the high risk of losing your money.
3. iShares Core S&P Growth ETF (NYSE: IUSG)
Copy link to sectionThe iShares Core S&P U.S. Growth ETF seeks to track the investment results of an index composed of large and mid-cap U.S. equities that exhibit growth characteristics. It offers exposure to a broad range of U.S. growth stocks, whose earnings are expected to grow at an above average rate relative to the market.
Much like the two ETFs above, IUSG invests in a range of sectors, although technology is where approximately 40% of its stocks belong. Its largest three holdings are the same as Schwab and SPDR and some of its other prominent investments include Tesla, Google, and Meta. It also includes growth stocks from other industries such as healthcare stocks and information technology.
Investing in this iShares etf is a good option for growth investors wanting exposure to the best U.S. based stocks. However, it’s important to keep in mind that it’s heavily weighted towards the technology industry, so any volatility in that sector will likely impact its price. Since its inception in 2000 it has gained over 200%, however, 100% came post-coronavirus.
82% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you can afford to take the high risk of losing your money.
4. SPDR S&P 400 Mid Cap Growth ETF (NYSEARCA: MDYG)
Copy link to sectionMDYG contains over 200 stocks and has nearly $2billion under management. It seeks to track the performance of the S&P MidCap 400 growth index. It consists of growth stocks that have the strongest characteristics based on: sales growth, earnings change to price ratio, and momentum.
As its name suggests, it invests in mid-cap U.S. based companies and has a more equal weighting across industries than the other ETFs on our list. About half of the fund is split between companies operating in the industrials, technology, and consumer discretionary sectors.
MDYG could be suitable to investors looking for high growth from lesser known companies. As it invests in mid-cap stocks, the potential for future growth could be higher, as opposed to larger companies who may already have grown to maturity. Its equal weighting amongst its holdings means it’s unlikely to be adversely affected by any single stock.
82% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you can afford to take the high risk of losing your money.
5. iShares Russell 2000 Growth ETF (NYSEARCA: IWO)
Copy link to sectionFinal spot on our list goes to the iShares Russell 2000 which gives exposure to small public U.S. companies whose earnings are expected to grow at an above-average rate. The ETF tracks the performance of a small cap growth index called the Russell 2000 growth index and is composed of over 1000 small-cap companies.
The fund is split across a broad range of industries although nearly three quarters is focused on the healthcare, technology, industrials, and consumer discretionary sectors. As it contains a large number of stocks, the fund employs an equal weighting strategy, meaning no single company is able to impact its performance.
Its focus on small-cap stocks makes it a slightly riskier investment compared to other ETFs on our list. However, since its inception it has gained over 300% in value and performed especially well during the pandemic. Investing in IWO could make part of a well balanced portfolio while gaining exposure to small companies with large growth potential.
82% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you can afford to take the high risk of losing your money.
Where to buy the best growth ETFs
Copy link to sectionYou can buy and sell ETFs in the same way as any normal stock. That means that before buying shares in an ETF you will need to sign up to a broker. The table below shows some of the best brokers offering ETFs. You can click the links and sign up in just a few minutes.
82% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you can afford to take the high risk of losing your money.
What is a growth ETF?
Copy link to sectionA growth ETF is an exchange traded fund that invests in stocks with growth aspects, offering investors a simple way to gain exposure to this investment style. Growth ETFs hold baskets of stocks displaying strong earnings and revenue growth, along with high valuation ratios like price-to-earnings.
The best growth ETFs are passively managed to track growth-oriented indexes such as the Russell 1000 Growth Index or Nasdaq-100 Index.
Growth ETFs tend to focus on fast-growing technology and consumer discretionary stocks. By providing diversified exposure to innovative large-cap and small-cap companies in high-growth industries, growth ETFs aim to deliver market-beating returns over time.
However, the growth investing strategy carries risks should rising interest rates or economic slowdowns negatively impact growth stock prices. Investors can choose growth ETFs tracking different market caps and sectors depending on preferences.
When added alongside value stocks, growth ETFs allow you to focus your portfolio towards companies showing more growth potential and earnings acceleration. For low-cost access to baskets of leading growth stocks, growth ETFs offer a practical option for investors seeking to add high growth areas to their portfolios.
Are growth ETFs a good investment?
Copy link to sectionYes they can be and are a good way to track some of the worlds best known stock indexes. Although for anyone seeking value from their investments looking at other ETF types may be a more suitable option.
Growth ETFs can include a range of stocks and company sizes. As we’ve seen from our list above, many include the best blue chip companies, while others focus on smaller cap stocks. Spreading money across a number of different growth ETFs is a good way to gain exposure to a variety of stocks that have the potential to grow.
You’ll need to register with a broker to buy an ETF and keep up to date with the latest news and developments. Both of which you can do by clicking on the links below.
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