What is the best large cap growth ETF?
Large-growth funds invest in stocks of big U.S. companies that are projected to grow faster than other large-cap stocks. Stocks in the top 70% of the capitalization of the U.S. equity market are defined as large-cap.
- Best Large-Cap ETFs of April 2024.
- Invesco QQQ Trust (QQQ)
- SPDR S&P 500 ETF Trust (SPY)
- Vanguard S&P 500 ETF (VOO)
- Vanguard Total Stock Market Index Fund ETF Shares (VTI)
- Vanguard Value Index Fund ETF Shares (VTV)
- Schwab U.S. Dividend Equity ETF (SCHD)
- Vanguard FTSE Developed Markets ETF (VEA)
- Vanguard Growth ETF (VUG)
- iShares Russell 1000 Growth ETF (IWF)
- iShares Morningstar Growth ETF (ILCG)
- Fidelity Fundamental Large Cap Growth ETF (FFLG)
- iShares S&P 500 Growth ETF (IVW)
- Vanguard Mega Cap Growth ETF (MGK)
- iShares Russell 2000 Growth ETF (IWO)
Large-growth funds invest in stocks of big U.S. companies that are projected to grow faster than other large-cap stocks. Stocks in the top 70% of the capitalization of the U.S. equity market are defined as large-cap.
QQQ - Performance Comparison. In the year-to-date period, VUG achieves a 7.96% return, which is significantly higher than QQQ's 5.38% return. Over the past 10 years, VUG has underperformed QQQ with an annualized return of 14.82%, while QQQ has yielded a comparatively higher 18.34% annualized return.
VTI is a total U.S. market fund and holds more than 3,500 stocks. VTI is better diversified and benefits from small and mid-cap stocks that grow into large caps. VOO is less diversified, tracking the performance of the S&P 500 Index. VOO excludes small and mid-cap stocks.
Large-cap stocks are one of the most popular ways to invest in the market. These companies have the deepest pockets, and their businesses are more resilient than a typical small-cap.
- 10-year return: 24.37%
- Assets under management: $10.9B.
- Expense ratio: 0.35%
- As of date: November 30, 2023.
| Ticker | Fund name | 5-year return |
|---|---|---|
| SOXX | iShares Semiconductor ETF | 30.70% |
| XLK | Technology Select Sector SPDR Fund | 24.57% |
| IYW | iShares U.S. Technology ETF | 24.09% |
| FTEC | Fidelity MSCI Information Technology Index ETF | 22.79% |
| Ticker | Company | Performance (Year) |
|---|---|---|
| MGK | Vanguard Mega Cap Growth ETF | 34.60% |
| VUG | Vanguard Growth ETF | 33.24% |
| VONG | Vanguard Russell 1000 Growth Index ETF | 32.86% |
| VGT | Vanguard Information Technology ETF | 30.75% |
How do I choose an ETF for growth?
The choice to focus on either value ETFs or growth ETFs comes down to personal risk tolerance. Growth ETFs may have higher long-term returns but come with more risk. Value ETFs are more conservative; they may perform better in volatile markets but can come with less potential for growth.
Most are considered high risk and are generally best suited for individuals with a long-term investment horizon and a healthy risk tolerance.
As an asset class, large-cap growth stocks offer relative stability, great capital appreciation potential and, in many cases, a good dividend income β all very attractive qualities to have in a long-term investment.
VOO - Performance Comparison. The year-to-date returns for both investments are quite close, with VUG having a 6.03% return and VOO slightly higher at 6.24%. Over the past 10 years, VUG has outperformed VOO with an annualized return of 14.69%, while VOO has yielded a comparatively lower 12.51% annualized return.
Ultimately, the choice between VUG and VOO depends on your personal preference, risk tolerance, time horizon, and investment goals. You can also combine both funds in your portfolio to achieve a balance between growth and value or diversify into other ETFs that cover different market segments or regions.
VGT - Performance Comparison. In the year-to-date period, QQQ achieves a 3.53% return, which is significantly higher than VGT's 2.10% return. Over the past 10 years, QQQ has underperformed VGT with an annualized return of 18.17%, while VGT has yielded a comparatively higher 19.85% annualized return.
Average Return
Over the past 10 years, VOO has had annualized average returns of 12.52% , compared to 11.91% for VTI.
Many people pair VOO with the Vanguard Total Bond Market ETF (BND) in a broader portfolio. The fixed income ETF has $95 billion in assets and is the largest bond ETF trading in the U.S. BND has two-thirds of its assets in U.S. government bonds, with most of the remainder in investment-grade corporate bonds.
The Vanguard Total Stock Market ETF is a popular way to save for retirement or long-term growth. The fund represents a snapshot of the stock market, allowing investors to track the gains of the market as a whole rather than invest in individual shares.
Holding too many ETFs in your portfolio introduces inefficiencies that in the long term will have a detrimental impact on the risk/reward profile of your portfolio. For most personal investors, an optimal number of ETFs to hold would be 5 to 10 across asset classes, geographies, and other characteristics.
Should I hold ETFs long term?
ETFs can be a great investment for long-term investors and those with shorter-term time horizons. They can be especially valuable to beginning investors. That's because they won't require the time, effort, and experience needed to research individual stocks.
However, the returns are lower compared to mid-cap or small-cap funds. In the long term (around five to seven years), these funds tend to offer good capital appreciation.
| Symbol | Name | Dividend Yield |
|---|---|---|
| XRMI | Global X S&P 500 Risk Managed Income ETF | 12.39% |
| YYY | Amplify High Income ETF | 12.27% |
| TUGN | STF Tactical Growth & Income ETF | 12.15% |
| SPYI | NEOS S&P 500 High Income ETF | 12.15% |
- Private credit.
- Individual stocks.
- Real estate.
- Fine art.
- Debt.
- A business.
- Private startups.
- Cryptocurrencies.
The Invesco S&P 500 High Dividend Low Volatility ETF has a 4.74% dividend yield, the highest among our recommendations, but its risk is average. Meanwhile, the iShares Core High Dividend ETF has a 4.09% dividend yield but an expense ratio of only 0.08%, much lower than the 0.3% ratio for the Invesco fund.
