In this article, we discuss 13 best growth ETFs to buy now. If you want to skip our discussion on growth investing, check out 5 Best Growth ETFs To Buy Now.
When interest rates went up in 2023, things changed. Companies had to rethink their plans and prioritize financial resilience over mere growth. Despite two years of interest rate increases causing some disruptions, the global economy has stayed strong regardless of persistent inflation. Developed economies in the West might see ongoing lower inflation as they move from a slow start to an economic recovery later in the year. Even though interest rates rose quickly in 2022 and 2023, many developed countries continued to grow, showing signs of strain only recently. For 2024, Invesco predicts a slight global economic slowdown, especially during the first half of the year. The United States has been resilient compared to the slowing growth in the eurozone and the UK. However, Invesco expects this slowdown to be short-lived as monetary policy adjusts to falling inflation. The firm believes that major central banks in developed countries have likely finished hiking interest rates and will start cutting them as growth slows and inflation calms down. This should help the economy recover towards normal growth in the second half of 2024 as people’s wages rise due to lower inflation.
During economic downturns, value stocks, which are generally cheaper than growth stocks, often suffer significant declines due to investor concerns. However, they tend to perform well as the economy begins to recover. Interestingly, the rebound of value stocks following the COVID-19 pandemic was not as strong as expected. This could be because investors in 2023 anticipated a recession that did not occur. Additionally, the anticipated fiscal spending in 2024 from government acts like the Infrastructure Investment and Jobs Act, CHIPS Act, and Inflation Reduction Act could boost sectors like finance and industrials. On the other hand, the recovery in 2023 also revived growth stocks following the downturn in 2022. Therefore, Morgan Stanley suggests that investors looking to add value stocks to their portfolios should not do so at the expense of growth stocks, which still offer potential in areas like consumer discretionary and technology. Investors might also want to consider reducing their exposure to defensive sectors such as consumer staples, healthcare, and utilities. While these sectors were favored during the bear market in 2022, they did not perform as well when the stock market rebounded in 2023 and may continue to underperform in 2024.
According to Matt Orton, chief market strategist at Raymond James Investment Management, investors should overlook concerns regarding elevated valuations and instead concentrate on growth in what he described as a “stockpicker’s market.” He pointed out that a significant portion of the recent market surge has been driven by the “Magnificent 7” mega-cap tech stocks, but they are now exhibiting varying performance trends. While there has been extensive discussion about the lofty valuations of US stocks, Orton argued that making historical comparisons may not be applicable. This is because today’s market makeup is distinct, with growth stocks anticipated to achieve higher-than-average earnings growth rates, often due to their involvement in rapidly advancing sectors like technology and AI, or because they offer distinctive products or services that confer a competitive advantage, such as healthcare firms with highly sought-after weight loss medications. Matt Orton commented:
“I fully think that the market could push 20, 21 times, and that’s a perfectly fair multiple for us to pay. It’s all about earnings growth and it’s all about leaning into where those fundamentals are, and trying to avoid the parts of the market where you don’t have a positive inflection in earnings. And if you do that, no matter what the valuation is, you can grow into it, and I think that’s the main message for investors, is ‘find growth.’”
Some of the best growth stocks to buy include Mastercard Incorporated (NYSE:MA), Broadcom Inc. (NASDAQ:AVGO), and Tesla, Inc. (NASDAQ:TSLA). However, we discuss the best growth ETFs in this article, which offer investors exposure to multiple growth stocks in a single investment vehicle.
Our Methodology
We curated our list of the best growth ETFs by choosing consensus picks from multiple credible websites. We have mentioned the 5-year share price performance of each ETF as of March 27, 2024, ranking the list in ascending order of the share price. We have also discussed the top holdings of the ETFs to offer better insight to potential investors.
Photo by Adam Nowakowski on Unsplash
Best Growth ETFs To Buy Now
13. Wisdomtree U.S. Quality Growth Fund (NYSE:QGRW)
5-Year Share Price Performance as of March 27: 71.13%
Wisdomtree U.S. Quality Growth Fund (NYSE:QGRW) aims to replicate the performance of the WisdomTree U.S. Quality Growth Index, excluding fees and expenses. It invests in large to mid-sized American companies known for their robust quality and growth attributes. As of March 26, 2024, Wisdomtree U.S. Quality Growth Fund (NYSE:QGRW) net assets worth approximately $320 million, featuring an expense ratio of 0.28%. Wisdomtree U.S. Quality Growth Fund (NYSE:QGRW) is one of the best growth ETFs to invest in.
Microsoft Corporation (NASDAQ:MSFT) is the largest holding of Wisdomtree U.S. Quality Growth Fund (NYSE:QGRW). J.P. Morgan, with an Overweight rating and a $440 price target for Microsoft Corporation (NASDAQ:MSFT) shares on March 14, highlighted the impact of Microsoft’s Copilot for Security AI chatbot on the company’s security capabilities, noting a paradigm shift.
According to Insider Monkey’s fourth quarter database, 302 hedge funds were bullish on Microsoft Corporation (NASDAQ:MSFT), compared to 306 funds in the prior quarter.
Like Mastercard Incorporated (NYSE:MA), Broadcom Inc. (NASDAQ:AVGO), and Tesla, Inc. (NASDAQ:TSLA), Microsoft Corporation (NASDAQ:MSFT) is one of the best growth stocks to invest in.
Carillon Eagle Growth & Income Fund stated the following regarding Microsoft Corporation (NASDAQ:MSFT) in its fourth quarter 2023 investor letter:
“Microsoft Corporation (NASDAQ:MSFT) performed well after reporting strong earnings supported by accelerated growth from Azure. The cloud business is seeing consistent trends from optimization while AI has contributed strongly to its growth.”
12. Vanguard Mega Cap Growth Index Fund (NYSE:MGK)
5-Year Share Price Performance as of March 27: 78.30%
Vanguard Mega Cap Growth Index Fund (NYSE:MGK) ranks 12th on our list of the best growth ETFs. Vanguard Mega Cap Growth Index Fund (NYSE:MGK) aims to replicate the CRSP US Mega Cap Growth Index’s performance through a passively managed, full-replication strategy. It offers investors a convenient way to gain diversified exposure to the largest growth stocks in the US market. The ETF was established on December 17, 2007. The fund’s expense ratio, as of December 22, 2023, stands at 0.07%. Vanguard Mega Cap Growth Index Fund (NYSE:MGK)’s portfolio holds 82 stocks, along with net assets of $18.6 billion as of February 29, 2024.
Vanguard Mega Cap Growth Index Fund (NYSE:MGK)’s top holdings include Apple Inc. (NASDAQ:AAPL). On March 26, Tencent agreed to provide key apps for Apple’s Vision Pro mixed-reality headset in China, including messaging app WeChat and a popular video-streaming service. Apple’s push for a streaming service in China faces challenges due to censorship regulations, necessitating a domestic partnership. Despite hurdles, Apple aims to strengthen its presence in China, which is a crucial market. Chinese companies like ByteDance have already introduced apps for Vision Pro outside China, indicating potential for further collaborations.
According to Insider Monkey’s fourth quarter database, 131 hedge funds were long Apple Inc. (NASDAQ:AAPL), compared to 134 funds in the last quarter.
Horizon Kinetics stated the following regarding Apple Inc. (NASDAQ:AAPL) in its fourth quarter 2023 investor letter:
“The full point is that if BYD has turned its attention from its domestic market to direct global competition, then other Chinese companies can do the same. The next most visible example of Chinese commercially applied technological prowess relates to the 2nd highest-weight company in the S&P 500, Apple Inc. (NASDAQ:AAPL).
In September 2023, Huawei Technologies introduced its Mate 60 Pro smartphone. It uses its own, internally developed 5G enabled chip that is apparently competitive with the Apple A17 chip. For practical purposes it has the functionality of the iPhone 15 Pro. This came as a great surprise – perhaps even shock – to the U.S. technology community, because four years ago the U.S. placed strict sanctions on China’s access to state-of-the-art semiconductor manufacturing technology…” (Click here to read the full text)
11. Fidelity Blue Chip Growth ETF (BATS:FBCG)
5-Year Share Price Performance as of March 27: 88.55%
Fidelity Blue Chip Growth ETF (BATS:FBCG) follows a domestic equity growth strategy primarily focused on large-cap companies. The fund seeks companies with strong earnings growth potential and sustainable business models that are potentially undervalued by the market in terms of growth rate or longevity. As of December 31, 2023, Fidelity Blue Chip Growth ETF (BATS:FBCG)’s gross expense ratio is 0.59%, and its portfolio consists of 158 stocks. It is one of the best growth ETFs to invest in.
NVIDIA Corporation (NASDAQ:NVDA) is one of the top holdings of Fidelity Blue Chip Growth ETF (BATS:FBCG). NVIDIA Corporation (NASDAQ:NVDA) revealed its new Blackwell GPU platform at its annual GTC developer conference, sparking optimism from UBS about a potential surge in demand, especially from the UAE, Saudi Arabia, Sweden, Japan, Korea, and Malaysia. UBS analyst Timothy Arcuri predicts that NVIDIA Corporation (NASDAQ:NVDA) could reach $150 billion in revenue by 2025, a 30% increase year-over-year. Despite concerns about supply and meeting Wall Street estimates, Arcuri raised NVIDIA Corporation (NASDAQ:NVDA)’s price target to $1,100 on March 22, viewing any near-term weakness as a buying opportunity given the company’s growth prospects.
According to Insider Monkey’s fourth quarter database, 173 hedge funds were bullish on NVIDIA Corporation (NASDAQ:NVDA), compared to 180 funds in the last quarter.
Orbis Global Equity Strategy stated the following regarding NVIDIA Corporation (NASDAQ:NVDA) in its fourth quarter 2023 investor letter:
“Never before has following the crowd made so much money. Nor, in our estimation, so little sense. But just look at the opportunities the crowd has left for those of us willing to take a different view. We could wax lyrical about the glaring difference in value between Korean banks priced at 4 times earnings, versus Apple at 28 times, despite diverging fundamentals—Apple is increasingly at risk of bans in China, while Korean banks could double their dividends.
Or how the thick margin of safety at Intel, backed by listed stakes and real saleable assets, compares to the slim margin for error at NVIDIA Corporation (NASDAQ:NVDA), trading at 13 times next year’s projected revenue. That revenue that could be competed away over time, while Intel’s semiconductor “fabs” in the US are increasingly valuable as the east and the west drift further apart.”
10. iShares Core S&P U.S. Growth ETF (NASDAQ:IUSG)
5-Year Share Price Performance as of March 27: 94.08%
iShares Core S&P U.S. Growth ETF (NASDAQ:IUSG) ranks 10th on our list of the best growth ETFs. The fund aims to replicate the performance of the S&P 900 Growth Index, which consists of large and mid-cap US equities with growth attributes. As of March 26, 2024, iShares Core S&P U.S. Growth ETF (NASDAQ:IUSG) holds net assets worth $16.8 billion, featuring an expense ratio of 0.04% and a portfolio of 471 stocks.
Amazon.com, Inc. (NASDAQ:AMZN) is one of the largest holdings of iShares Core S&P U.S. Growth ETF (NASDAQ:IUSG). On March 27, Amazon.com, Inc. (NASDAQ:AMZN) revealed that it is making a significant financial commitment to AI technology with a $2.75 billion strategic investment in Anthropic. It has now invested $4 billion in Anthropic. Anthropic’s Claude 3 chatbot competes with Microsoft-backed OpenAI’s ChatGPT. This marks Amazon.com, Inc. (NASDAQ:AMZN)’s largest outside investment since $1.3 billion in EV-maker Rivian.
According to Insider Monkey’s fourth quarter database, 293 hedge funds were bullish on Amazon.com, Inc. (NASDAQ:AMZN), compared to 286 funds in the last quarter.
Alger Spectra Fund stated the following regarding Amazon.com, Inc. (NASDAQ:AMZN) in its fourth quarter 2023 investor letter:
“Amazon.com, Inc. (NASDAQ:AMZN) is a well-known online retailer and cloud computing leader. The company’s Amazon Web Services (AWS) business provides utility-scale cloud offerings that facilitate corporate America’s transition to digital systems. During the quarter, shares contributed to performance as Amazon reported strong fiscal third quarter results, where the company beat sales and earnings estimates. Moreover, AWS growth remained steady. contributing to Amazon’s better-than-expected operating income despite concerns around cloud cost optimizations, showing signs of increasing net new cloud workloads. While management noted that customers remain price-conscious and focused on deals, demand remains strong across all segments, leading the company to raise their fiscal fourth quarter revenue and operating income guidance.”
9. iShares S&P 500 Growth ETF (NYSE:IVW)
5-Year Share Price Performance as of March 27: 95.92%
iShares S&P 500 Growth ETF (NYSE:IVW) aims to replicate the performance of the S&P 500 Growth Index, which consists of large-cap US equities displaying growth attributes. As of March 26, 2024, the fund’s net assets exceed $44 billion, featuring an expense ratio of 0.18%. Its portfolio consists of 227 stocks. iShares S&P 500 Growth ETF (NYSE:IVW) is one of the best growth ETFs to buy.
Meta Platforms, Inc. (NASDAQ:META) is one of the top holdings of the iShares S&P 500 Growth ETF (NYSE:IVW). On March 18, Meta Platforms, Inc. (NASDAQ:META) shares increased by 1.4% in premarket trading following Mizuho Securities’ designation of the tech giant as a top pick. Mizuho analyst James Lee maintains a Buy rating and a $575 price target on Meta, expecting fiscal 2024 revenue to surpass expectations due to improved monetization in Reels, geographic expansion, partnerships like Amazon’s collaboration with Shops, and enhanced video placements.
According to Insider Monkey’s fourth quarter database, 242 hedge funds were bullish on Meta Platforms, Inc. (NASDAQ:META), compared to 234 funds in the prior quarter.
Artisan Value Fund stated the following regarding Meta Platforms, Inc. (NASDAQ:META) in its fourth quarter 2023 investor letter:
“Netflix and Meta Platforms, Inc. (NASDAQ:META)—both categorized in the communication services sector—rounded out our top five contributors in Q4 as well as for 2023. Both stocks suffered sharp declines in 2022, each losing more than 50% of their market capitalizations. In 2022, we purchased Netflix and added to our position in Meta on weakness as both stocks were selling significantly below our estimates of fair value. Meta’s challenges were more self-inflicted as a ramp-up in spending caused free cash flow to plummet. We saw Netflix’s slowing subscriber growth as a normal feature of a maturing streaming market.
With regard to Meta, the company’s “year of efficiency,” as 2023 was declared by Mark Zuckerberg, involved a recalibration of its spending plans to focus on profitability. While the stock also benefited from enthusiasm around artificial intelligence, the re-rating in the price multiple seems entirely rational as shares were selling for less than 10X next year’s estimated earnings at its 2022 lows for a business that still had strong growth drivers, consistent free cash flow generation and a large net cash position. While Meta is included in the Magnificent Seven mega-cap stocks, Meta is trading much cheaper (~25X P/E) than all the others aside from Alphabet (~24X P/E), which is the one other of the Magnificent Seven stocks we hold. While Meta’s stock is no longer extremely cheap, we feel it is still reasonably priced for a good business with attractive growth prospects. We did trim our positions in Meta and Netflix to put capital to work in names having greater discounts.”
8. SPDR Portfolio S&P 500 Growth ETF (NYSE:SPYG)
5-Year Share Price Performance as of March 27: 96.53%
SPDR Portfolio S&P 500 Growth ETF (NYSE:SPYG) aims to mirror the performance of the S&P 500 Growth Index before fees and expenses. The index comprises stocks with the strongest growth attributes, determined by factors such as sales growth, earnings change to price ratio, and momentum. It ranks 8th on our list of the best growth ETFs. As of March 26, 2024, the fund has $24.8 billion in assets under management, offers a gross expense ratio of 0.04%, and features a portfolio comprising 227 stocks.
Alphabet Inc. (NASDAQ:GOOG) is one of the top holdings of SPDR Portfolio S&P 500 Growth ETF (NYSE:SPYG). On March 22, Wedbush Securities added Alphabet Inc. (NASDAQ:GOOG) to its Best Ideas List and increased its price target on the shares to $175 from $160.
According to Insider Monkey’s fourth quarter database, 166 hedge funds were bullish on Alphabet Inc. (NASDAQ:GOOG), compared to 163 funds in the prior quarter.
Pershing Square Holdings stated the following regarding Alphabet Inc. (NASDAQ:GOOG) in its fourth quarter 2023 investor letter:
“In early 2023, we initiated an investment in Alphabet Inc. (NASDAQ:GOOG), the parent company of Google, at a highly attractive valuation during a period when apprehension about the company’s competitive positioning in AI overshadowed the high-quality nature of its business and strong growth prospects.
Since we initiated our position, the company has delivered impressive operating results. With two of the highest ROI and most resilient ad formats in Search and YouTube, Google occupies a dominant position in the secularly fast-growing digital advertising market. As the digital advertising market recovered over the course of the year, revenue growth in Google’s advertising business accelerated from 3% in Q1 2023 to 10% in Q4 2023. Moreover, the company realized significant progress on its substantial margin expansion opportunity and maintained a robust capital return program. In 2023, operating profit margins expanded by approximately 225 basis points (bps), excluding one-time severance and real estate charges, as the Cloud segment reached breakeven profitability. We expect continued cost control, automation efficiencies, and operating leverage in under-earning segments (Cloud & YouTube) to sustain margin expansion as Google invests behind AI initiatives.
The company is using its ample free cash flow to repurchase approximately 4% of its outstanding shares on an annual basis…” (Click here to read the full text)
7. Vanguard S&P 500 Growth Index Fund ETF Shares (NYSE:VOOG)
5-Year Share Price Performance as of March 27: 97.03%
Vanguard S&P 500 Growth Index Fund ETF Shares (NYSE:VOOG) invests in stocks within the S&P 500 Growth Index, which includes growth-oriented companies from the S&P 500. It aims to closely follow the index’s performance, reflecting overall U.S. growth stock returns. Vanguard S&P 500 Growth Index Fund ETF Shares (NYSE:VOOG) ranks 7th on our list of the best growth ETFs. The ETF was established on September 7, 2010. The portfolio consists of 226 stocks, with net assets of $10 billion as of February 29, 2024 and an expense ratio of 0.10%.
Eli Lilly and Company (NYSE:LLY) is one of the top holdings of Vanguard S&P 500 Growth Index Fund ETF Shares (NYSE:VOOG). Eli Lilly and Company (NYSE:LLY)’s 2024 guidance indicates revenue is forecasted between $40.4 billion to $41.6 billion, surpassing the consensus of $39.14 billion. EPS is expected to range from $11.80 to $12.30, and non-GAAP EPS from $12.20 to $12.70, compared to a $12.38 consensus.
According to Insider Monkey’s fourth quarter database, 102 hedge funds were bullish on Eli Lilly and Company (NYSE:LLY), same as the prior quarter.
Like Mastercard Incorporated (NYSE:MA), Broadcom Inc. (NASDAQ:AVGO), and Tesla, Inc. (NASDAQ:TSLA), Eli Lilly and Company (NYSE:LLY) is one of the best growth stocks to invest in.
Aristotle Atlantic Core Equity Strategy stated the following regarding Eli Lilly and Company (NYSE:LLY) in its fourth quarter 2023 investor letter:
“Eli Lilly and Company (NYSE:LLY) is a leading pharmaceutical company that develops diabetes, oncology, immunology and neuroscience medicines. The company generates over half of its revenue in the U.S. from its top-selling drugs Trulicity, Verzenio and Taltz. The company operates in a single business segment, Human pharmaceutical products.
Eli Lilly has a deep pipeline in treatment areas focused on metabolic disorders, oncology, immunology and central nervous system disorders. Currently, there are two phase three assets, Orforglipron, an oral GLP-1 and retatrutide, a triple incretin agonist, which have the potential to expand upon the potential success of Mounjaro. We believe that Mounjaro has the potential to commercialize beyond type 2 diabetes and obesity, potentially in the areas mentioned above of heart disease, sleep apnea, fatty liver disease and chronic kidney disease. We believe the premium valuation is supported by this outsized growth profile.”
6. Vanguard Growth Index Fund ETF Shares (NYSE:VUG)
5-Year Share Price Performance as of March 27: 120.11%
Vanguard Growth Index Fund ETF Shares (NYSE:VUG) aims to replicate the CRSP US Large Cap Growth Index’s performance, offering investors an investment vehicle to mirror the performance of major growth stocks in the United States. It employs a passively managed, full-replication strategy. Vanguard Growth Index Fund ETF Shares (NYSE:VUG) is one of the best growth ETFs to buy. The fund was established on January 26, 2004. As of February 29, 2024, Vanguard Growth Index Fund ETF Shares (NYSE:VUG) holds $222.4 billion in net assets, with a portfolio of 208 stocks and an expense ratio of 0.04%.
Tesla, Inc. (NASDAQ:TSLA) is one of the top holdings of Vanguard Growth Index Fund ETF Shares (NYSE:VUG). On March 27, Bradley Gerstner, CEO of Altimeter Capital, said that investing in Elon Musk as a “no brainer,” especially in the era of artificial intelligence where Musk is pioneering market-leading models. Gerstner recently bought Tesla, Inc. (NASDAQ:TSLA) stocks, emphasizing Musk’s exceptional leadership as a product engineer. He highlighted Tesla’s Full Self-Driving Beta v12 launch as a catalyst for his bullish outlook on the stock.
According to Insider Monkey’s fourth quarter database, 82 hedge funds were bullish on Tesla, Inc. (NASDAQ:TSLA), compared to 81 funds in the last quarter.
Alger Spectra Fund stated the following regarding Tesla, Inc. (NASDAQ:TSLA) in its fourth quarter 2023 investor letter:
“Tesla, Inc. (NASDAQ:TSLA) is an electric vehicle manufacturer with a significant technological lead in its large and rapidly growing addressable market. Tesla is a transportation company that is setting the pace for industry innovation, in our view. During the quarter, the company reported weaker-than-expected fiscal third quarter earnings, where gross margins were negatively impacted by factory downtime and ramping production volumes at new manufacturing plants. However, the company noted that they remain confident by the amount of data that Tesla’s established and growing fleet of vehicles has gathered, which may bode well for the company’s full self-driving capabilities.”
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Disclosure: None. 13 Best Growth ETFs To Buy Now is originally published on Insider Monkey.