7 Best Growth ETFs for 2022

We have identified the best growth ETFs for 2022. While this list is not exhaustive, it will certainly familiarize you with the most popular growth funds on the market.

Best Growth ETFs: Overview

Generally speaking, these growth ETFsconsist of tech stocks that trade at high multiples.

Big Tech makes up a lot of these growth ETFs. However, some providethematic exposure to growth stocks within a particular industry or a group of growth stocks based on their size.

In this article, we include the various types of growth ETFs, so you are aware of all your options.

Without further delay, here are some of the best growth ETFs for 2022:

• Invesco QQQ Trust (QQQ)
• Vanguard Growth ETF (VUG)
• iShares Russell 1000 Growth ETF (IWF)
• ARK Innovation ETF (ARKK)
• Vanguard Small Cap Growth (VBK)
• iShares Biotechnology ETF (IBB)
• ProShares UltraPro QQQ (TQQQ)

Next, we will examine them in more detail and compare the ones that are similar.

Best Growth ETFs

#1. Invesco QQQ Trust (QQQ)

• 1-Year Performance: +8.66%
• Expense Ratio: 0.20%
• Annual Dividend Yield: 0.45%
• AUM: $186.73 billion
• 3 Month Avg. Volume: 67,440,512
• Number of Holdings: 103
• Inception Date: 1999

The Invesco QQQ ETF consists of all the stocks in the Nasdaq-100 Index, which includes 100 of the largest domestic and international nonfinancial companies listed on the Nasdaq Stock Exchange.

The Nasdaq-100 Index is one of the three popular indices that people look at to see “how the market is doing” – the others being the S&P 500 Indexand the Dow Jones Industrial Average.

However, the Nasdaq-100 Index has significantly outperformed the other indices over the last decade, thanks to Big Tech.

Led by Big Tech, QQQ became one of the most popular and best-performing funds on the market.

As these tech stocks continued to grow at unprecedented rates, their allocations in broad market indices increased accordingly.

So much so that the top holdings in S&P 500 funds like VOO began to look very similar to the top holdings in Nasdaq ETFs and tech ETFs like QQQ.

Despite being trillion-dollar companies, the leaders in QQQ are still growing at a remarkable rate. Categorizing them as “growth stocks” is a disservice – they are in a category of their own.

However, there are more than five stocks in QQQ, even if they make up 40% of its assets.

Most of them are also tech stocks, but there’s a healthy amount of other industries like Consumer Staples, Health Care, and Consumer Services in the fund.

QQQ Top Holdings:

• Apple (AAPL) 12.65%
• Microsoft (MSFT) 10.08%
• Alphabet (GOOG, GOOGL) 7.60%
• Amazon.com (AMZN) 7.22%
• Tesla (TSLA) 4.08%

#2. Vanguard Growth ETF (VUG)

• 1-Year Performance: +9.61%
• Expense Ratio: 0.04%
• Annual Dividend Yield: 0.49%
• AUM: $80.55 billion
• 3 Month Avg. Volume: 1,133,631
• Number of Holdings: 281
• Inception Date: 2004

The Vanguard Growth ETF tracks the performance of an index that represents the large-cap growth segment of the U.S. equity market.

It is the second-largest growth ETF on the market – behind the Invesco QQQ ETF. Given the similarities between these funds, at least on the surface, we will use this section to compare them in more detail.

The top holdings and their corresponding weightings in QQQ and VUG are nearly identical.

However, QQQ’s benchmark doesn’t include financials. So you won’t see Visa or Mastercard in QQQ, but they are the 10th and 11th largest holdings in VUG, respectively.

Additionally, while both funds have the majority of their assets invested in their top 10 holdings, VUG holds a total of 281 stocks, while QQQ holds just 103.

This suggests that VUG may be more diversified than QQQ, at least in terms of number of holdings.

The last detail we’ll look at is expense ratios. VUG is about as low-cost as you can get, charging just 0.04%.

QQQ is also relatively low-cost at 0.20%, but that is 5x more expensive than VUG.

VUG Top Holdings:

• Apple (AAPL) 11.71%
• Microsoft (MSFT) 10.68%
• Alphabet (GOOG, GOOGL) 6.90%
• Amazon.com (AMZN) 6.08%
• Tesla (TSLA) 3.59%

#3. iShares Russell 1000 Growth ETF (IWF)

• 1-Year Performance: +11.40%
• Expense Ratio: 0.19%
• Annual Dividend Yield: 0.50%
• AUM: $71.10 billion
• 3 Month Avg. Volume: 2,392,387
• Number of Holdings: 502
• Inception Date: 2000

The iShares Russell 1000 Growth ETF seeks to track the investment results of an index composed of large- and mid-capitalization U.S. equities that exhibit growth characteristics.

IWF is similar to the Vanguard Growth ETF above, but it takes another step further in the diversification category. i

IWF consists of 200+ more stocks than VUG, amounting to 502 total.

Consider going with IWF if you want to maximize your diversification in this investment category.

Please note that IWF is not the only ETF that tracks the Russell 1000 Growth Index. For example, the Vanguard Russell 1000 Growth ETF (VONG) does the same thing and is more cost-friendly.

IWF Top Holdings:

• Apple (AAPL) 12.53%
• Microsoft (MSFT) 10.65%
• Amazon.com (AMZN) 6.50%
• Alphabet (GOOG, GOOGL) 6.47%
• Tesla (TSLA) 3.46%

#4. ARK Innovation ETF (ARKK)

• 1-Year Performance: -49.35%
• Expense Ratio: 0.75%
• Annual Dividend Yield: 1.74%
• AUM: $12.13 billion
• 3 Month Avg. Volume: 17,377,804
• Number of Holdings: 41
• Inception Date: 2014

The ARK Innovation ETF probably needs no introduction. This flagship fund was once the largest actively managed ETF globally with over $20+ billion in assets.

It has struggled in the last year, but ARK’s investment philosophy remains very much intact.

The firm is doubling down andbuying the dipin its core group of stocks, such as Tesla, Zoom, and Coinbase, among others.

ARK believes that some of these hyper-growth stocks have fallen so much that they’ve entered a zone of “deep value.”

ARK has a very long time horizon, and the stocks in ARKK accurately reflect this time preference.

The ETF holds the companies that are building the innovations of tomorrow.

It is industry-agnostic, investing in biotechnology, financial technology, robotics, autonomous tech, and even space exploration.

ARKK is one of six active ARK ETFs offered by Cathie Wood and ARK.

Others provide more granular exposure to specific innovation themes, such as genomics, the space economy, and autonomous machines.

ARKK is the most expensive and concentrated fund on our list. It’s also the only one that is actively managed.

We recommend further familiarizing yourself with ARK’s objectives before buying one of their funds, or you may lack the conviction to hold during drawdowns.

ARKK Top Holdings:

• Tesla (TSLA) 8.37%
• Teladoc Health (TDOC) 6.43%
• Roku (ROKU) 6.27%
• Zoom Video Communications (ZM) 6.22%
• Coinbase (COIN) 5.67%

#5. Vanguard Small Cap Growth (VBK)

• 1-Year Performance: -14.57%
• Expense Ratio: 0.07%
• Annual Dividend Yield: 0.38%
• AUM: $14.26 billion
• 3 Month Avg. Volume: 353,375
• Number of Holdings: 761
• Inception Date: 2004

The Vanguard Small Cap Growth ETF invests in U.S. small-cap growth stocks.

It holds 761 small-cap growth stocks across all sectors of the economy – and is relatively balanced in those sectors.

Here are VBK’s top sectors and their allocations: Technology (22%), Health Care (21%), Industrials (18%), Consumer Discretionary (16%), and Real Estate (8%).

Generally speaking, small-cap stocks are more volatile than large caps. And growth stocks are more volatile than value stocks. VBK smashes those two realities together for you at a low cost.

The Vanguard Small Cap Growth ETF has a very specific investment focus. You have to like small caps, and you have to like growth stocks, or else this ETF is not for you.

VBK Top Holdings:

• Bio-Techne (TECH) 0.85%
• Entegris (ENTG) 0.79%
• Trex Company (TREX) 0.65%
• Coterra Energy (CTRA) 0.65%
• Equity LifeStyle Properties (ELS) 0.61%

#6. iShares Biotechnology ETF (IBB)

• 1-Year Performance: -21.17
• Expense Ratio: 0.45%
• Annual Dividend Yield: 0.22%
• AUM: $8.54 billion
• 3 Month Avg. Volume: 2,716,617
• Number of Holdings: 761
• Inception Date: 2001

The iShares Biotechnology ETF invests in the U.S.-listed equities in the biotechnology sector, specifically biotechnology and pharmaceutical stocks listed on the NASDAQ.

Biotech is probably the most growth-oriented industry that you can invest in. Few sectors embody the characteristics of “growth” like this one.

Most biotech companies are not profitable, and their future profitability is not guaranteed whatsoever.

Their earnings are well into the future, and the market prices their stocks accordingly. When inflation rises, or the Federal Reserve *thinks* about raising interest rates, these stocks tend to get pummeled.

This happens to growth stocks more generally, but it happens more severely to the biotech sector because they’re even further out on the risk curve than your everyday tech stock.

We included IBB to inform you of the varying degrees of specificity regarding growth investing. However, it is one of our favorite biotech ETFson the market.

In addition to the secular biotech trade, we find similarly enticing opportunities in semiconductor ETFs and cybersecurity ETFs.

IBB Top Holdings:

• Amgen (AMGN) 10.65%
• Gilead Sciences (GILD) 7.40%
• Vertex Pharmaceuticals (VRTX) 5.75%
• Regeneron Pharmaceuticals (REGN) 5.74%
• Illumina (ILMN) 4.51%

#7. ProShares UltraPro QQQ (TQQQ)

• 1-Year Performance: N/A
• Expense Ratio: 0.95%
• Annual Dividend Yield: N/A
• AUM: $17.83 billion
• 3 Month Avg. Volume: 112,262,792
• Number of Holdings: 112
• Inception Date: 2010

The ProShares UltraPro QQQ ETF is a 3x leveraged fund used to day-trade the Nasdaq-100 Index.

It is designed to deliver 3x the daily performance of the Nasdaq-100. So if QQQ increases 3% on the day, TQQQ will deliver 9% daily returns – and vice-versa.

TQQQ is not meant to be held for more than a single day.

Its leverage resets every day, and due to compounding, you can expect it to deliver significantly different results than 3x QQQ if held for longer than a day.

This is why its 1-year performance is “N/A.”

TQQQ also has an evil twin, the ProShares UltraPro Short QQQ ETF (SQQQ). It delivers -3x the daily return of the Nasdaq-100 Index, effectively shorting growth stocks in the short term.

TQQQ Top Holdings:

• Apple (AAPL) 12.65%
• Microsoft (MSFT) 10.08%
• Alphabet (GOOG, GOOGL) 7.60%
• Amazon.com (AMZN) 7.22%
• Tesla (TSLA) 4.08%

Alternatives to the Best Growth ETFs

There is a seemingly endless amount of growth ETFs on the market. Here are some alternatives to the best growth ETFs:

• Vanguard Information Technology ETF (VGT)
• Schwab U.S. Large-Cap Growth ETF (SCHG)
• Vanguard Russell 1000 Growth ETF (VONG)
• Invesco S&P 500 Pure Growth ETF (RPG)
• SPDR Portfolio S&P 500 Growth ETF (SPYG)
• Vanguard S&P 500 Growth ETF (VOOG)
• Vanguard Mega Cap Growth ETF (MGK)
• Invesco NASDAQ 100 ETF (QQQM)
• Invesco NASDAQ Next Gen 100 ETF (QQQJ)
• iShares Semiconductor ETF (SOXX)
• VanEck Semiconductor ETF (SMH)
• SPDR S&P Biotech ETF (XBI)
• Global X Cybersecurity ETF (BUG)
• Global X Cloud Computing ETF (CLOU)

Many of these are general funds, and some are thematic. The best one for your portfolio ultimately depends on the type of exposure you’re seeking.

Best Growth ETFs: FAQs

Are growth ETFs a good investment?

Growth ETFs are a good investment if you want diversified exposure to the broad technology sector. You can gain frictionless access to hundreds of growth stocks within a single growth ETF – and at a low cost.

What is a high-growth ETF?

High growth ETFs include QQQ, VUG, IWF, ARKK, QQQJ, QQQM, TQQQ, SQQQ, VBK, SOXX, SMH, and BUG, among hundreds of others.

Is the Vanguard Growth ETF a good investment?

The Vanguard Growth ETF (VUG) is a good investment if you want broad exposure to growth stocks at a low cost. Alternatives to the Vanguard Growth ETF include the Invesco QQQ ETF (QQQ), the Vanguard Information Technology ETF (VGT), and the Vanguard S&P 500 Growth ETF (VOOG).

Is VOO a growth ETF?

VOO provides plenty of exposure to growth stocks. Its top holdings are nearly identical to the top growth ETFs on the market, mostly consisting of tech stocks that trade at high valuations.

Bottom Line: Best Growth ETFs

Hopefully, you’re now more familiar with the full landscape of growth ETFs.

Given the vast array of these funds, you’re bound to find the optimal one for you.

This article is for informational purposes only, and it is not intended to be investment advice. Read our editorial guidelines and public equities research methodology to learn more about how we selected the best growth ETFs.