Growth ETFs
A growth ETF follows an index that selects stocks based on the growth rate of each stock. Some growth ETFs will also weight their holdings based on each stock's growth rate, rather than weighting their holdings using market capitalization.
The concept of a "growth ETF" is a little confusing because during the 1990s and early 2000s, when ETFs were first taking off, the investment community tried to classify all stocks into "value" stocks and "growth" stocks. So during the early days of the ETF industry, if you wanted to outperform the market, you had to buy an ETF that was labeled as either a "value ETF" or a "growth ETF". Each of the major index providers (MSCI, Russell, FTSE, and S&P) had their own way of classifying every stock as either a "growth" or a "value" stock.
Fast forward to today. Today, with the new terminology of "smart beta" and "factor investing", the concept of every stock being a "value" stock or a "growth" stock is somewhat outdated. Many of the old "growth" ETFs would actually be labeled today as a "multi-factor" ETF, because if you read the fine print about what the old "growth indexes" were doing, they were looking at numerous factors like quality, momentum, and volatility.
Because the tricky part about understanding growth ETFs is understanding what they define as "growth", let's run through some examples.
IVW, the iShares S&P 500 Growth ETF, one of the oldest growth ETFs, tracks the S&P 500 Growth Index, which measures growth using three factors: sales growth, the ratio of earnings change to price, and momentum. The selected stocks (around 300) are weighted using market capitalization.
VUG, the Vanguard Growth ETF, another one of the oldest growth ETFs, tracks the performance of the CRSP U.S. Large Cap Growth Index. CRSP classifies growth securities using the following factors: future long-term growth in earnings per share (EPS), future short-term growth in EPS, 3-year historical growth in EPS, 3-year historical growth in sales per share, current investment-to-assets ratio, and return on assets.
RPG, the S&P 500 Pure Growth ETF, tracks the S&P 500 Pure Growth Index. Similar to the S&P 500 Growth Index, the S&P 500 Pure Growth Index selects growth stocks using three factors: sales growth, the ratio of earnings change to price, and momentum. But only stocks with the highest growth characteristics are included in the index (about 115 stocks), and the stocks are weighted in the index based on their style score.
Growth ETFs are tricky to analyze and categorize in the context of factor investing because many growth ETFs are actually multi-factor ETFs, but they aren't labeled as "multi-factor" ETFs.
VUG, for example, uses several earnings related criteria, including return on assets, that factor research has labeled as the "quality" factor. VUG also screens for "current investment-to-assets ratio", which factor research has labeled as the "investment factor". So VUG is a multi-factor ETF using the quality, growth and investment factors, but it was launched before "smart beta" was invented as a marketing idea.
IVW and RPG are similarly tricky to analyze in terms of factor investing. They both screen on "price momentum", which is a well known factor. They also screen using the "ratio of earnings change to price", which presumably is a way to screen for profitable companies, which would be the "quality" factor, and also maybe a way to screen on value.
There are a large number of growth ETFs, as shown in this table:
| Name | Symbol | Last price | Currency |
|---|---|---|---|
| IQ MacKay Municipal Insured ETF IQ Winslow Large Cap Growth ETF | ARCX:IWLG | 48.02 | USD |
| SPDR Portfolio S&P 500 Growth ETF | ARCX:SPYG | 89.04 | USD |
| First Trust Multi-Manager Small Cap Opportunities ETF | ARCX:MMSC | 21.09 | USD |
| AMERICAN CENTURY STOXX US QL | ARCX:QGRO | 101.43 | USD |
| SoFi Select 500 | ARCX:SFY | 110.31 | USD |
| NuShares ESG Large-Cap Growth | BATS:NULG | 87.30 | USD |
| ETF Series Solutions AAM Sawgrass US Small Cap Quality Growth ETF | ARCX:SAWS | 19.79 | USD |
| iShares S&P Mid-Cap 400 Growth ETF | ARCX:IJK | 91.72 | USD |
| Motley Fool Global Opportunities ETF | BATS:TMFG | 28.75 | USD |
| Professionally Managed Portfolios Congress Large Cap Growth ETF | ARCX:CAML | 34.44 | USD |
| The Alger ETF Trust Alger Concentrated Equity ETF | ARCX:CNEQ | 26.29 | USD |
| Litman Gregory Funds Trust Polen Capital China Growth ETF | ARCX:PCCE | 11.37 | USD |
| The Advisors? Inner Circle Fund II CastleArk Large Growth ETF | ARCX:CARK | 39.98 | USD |
| T. Rowe Price Growth Stock ETF | ARCX:TGRW | 40.37 | USD |
| ETRACS 2x Leveraged US Growth Factor TR ETN | ARCX:IWFL | 49.07 | USD |
| Strive 1000 Growth ETF | XNYS:STXG | 44.10 | USD |
| Franklin Templeton ETF Trust Franklin Focused Growth ETF | BATS:FFOG | 40.56 | USD |
| Alger Mid Cap 40 ETF | ARCX:FRTY | 19.26 | USD |
| iShares Core US Growth | XNAS:IUSG | 141.02 | USD |
| First Trust Small Cap Growth AlphaDEX Fd | XNAS:FYC | 78.66 | USD |
| Alger 35 ETF | ARCX:ATFV | 25.52 | USD |
| Professionally Managed Portfolios Congress SMid Growth ETF | ARCX:CSMD | 30.17 | USD |
| ETF Series Solutions AAM Sawgrass US Large Cap Quality Growth ETF | ARCX:SAWG | 20.28 | USD |
| Spdr S&P600 Scg | ARCX:SLYG | 91.48 | USD |
| Goldman Sachs ETF Trust Goldman Sachs MarketBeta Russell 1000 Growth Equity ETF | ARCX:GGUS | 54.86 | USD |
| The Alger ETF Trust Alger Weatherbie Enduring Growth ETF | ARCX:AWEG | 25.18 | USD |
| Pacer US Small Cap Cash Cows Growth Leaders ETF | XNAS:CAFG | 25.79 | USD |
| Vanguard S&P 500 Growth ETF | ARCX:VOOG | 371.24 | USD |
| PGIM ETF Trust PGIM Jennison Focused Growth ETF | ARCX:PJFG | 96.82 | USD |
| Tidal Trust II CoreValues Alpha Greater China Growth ETF | ARCX:CGRO | 23.62 | USD |
| INVESCO S&P 500 PURE GROWTH | ARCX:RPG | 42.21 | USD |
| iShares Morningstar Mid-Cap Growth ETF | ARCX:IMCG | 76.88 | USD |
| Vanguard Russell 1000 Growth ETF | XNAS:VONG | 104.91 | USD |
| iShares Russell Top 200 Growth | ARCX:IWY | 238.20 | USD |
| Janus Small/Mid Cap Growth Alpha ETF | XNAS:JSMD | 75.77 | USD |
| Vanguard Small-Cap Growth | ARCX:VBK | 284.22 | USD |
| First Trust Large Cap Growth AlphaDEX Fd | XNAS:FTC | 140.22 | USD |
| Schwab US Large-Cap Growth | ARCX:SCHG | 28.31 | USD |
| Vanguard Mega Cap 300 Growth Index | ARCX:MGK | 349.29 | USD |
| DBX ETF Trust Xtrackers S&P 500 Growth ESG ETF | BATS:SNPG | 46.25 | USD |
| Spdr S&P400 Mcg | ARCX:MDYG | 87.67 | USD |
| Litman Gregory Funds Trust Polen Capital Global Growth ETF | ARCX:PCGG | 11.95 | USD |
| Hartford Large Cap Growth ETF | BATS:HFGO | 23.96 | USD |
| Nuveen Winslow Large-Cap Growth ESG ETF | ARCX:NWLG | 33.74 | USD |
| iShares Russell 2000 Growth ETF | ARCX:IWO | 291.14 | USD |
| SHL Telemedicine Ltd VanEck Morningstar Wide Moat Growth ETF | BATS:MGRO | 31.13 | USD |
| JPMorgan International Growth ETF | ARCX:JIG | 64.14 | USD |
| iShares S&P 500 Growth ETF | ARCX:IVW | 102.76 | USD |
| Advisors Series Trust Logan Capital Broad Innovative Growth ETF | ARCX:LCLG | 53.80 | USD |
| VanEck Vect India Small-Cap Index ETF | ARCX:GLIN | 51.58 | USD |
| First Trust Exchange-Traded Fund VIII FT Raymond James Multicap Growth Equity ETF | ARCX:RJMG | 24.20 | USD |
| Federated Hermes ETF Trust Federated Hermes MDT Large Cap Growth ETF | ARCX:FLCG | 28.90 | USD |
| MFAM Small-Cap Growth ETF | BATS:TMFS | 35.81 | USD |
| Pacer US Cash Cows Growth ETF | ARCX:BUL | 47.11 | USD |
| American Century Sustainable Growth ETF | ARCX:ESGY | 59.12 | USD |
| American Century Mid Cap Growth Impact ETF | ARCX:MID | 61.46 | USD |
| First Trust Growth Strength ETF | XNAS:FTGS | 31.61 | USD |
| Pacer US Large Cap Cash Cows Growth Leaders ETF | XNAS:COWG | 32.88 | USD |
| Vanguard Mid-Cap Growth | ARCX:VOT | 259.98 | USD |
| J.P. Morgan Exchange-Traded Fund Trust JPMorgan Active Growth ETF | ARCX:JGRO | 82.22 | USD |
| Affinity World Leaders Equity ETF Foundations Dynamic Growth ETF | BATS:FDGR | 14.09 | USD |
| Putnam Focused Large Cap Growth ETF | ARCX:PGRO | 39.33 | USD |
| First Trust Multi-Manager Large Growth ETF | ARCX:MMLG | 30.84 | USD |
| Macquarie ETF Trust Macquarie Focused Large Growth ETF | ARCX:LRGG | 27.85 | USD |
| Fidelity Blue Chip Growth ETF | BATS:FBCG | 47.14 | USD |
| First Trust Mid Cap Growth AlphaDEX Fu | XNAS:FNY | 81.20 | USD |
| Pacer Funds Trust Pacer Developed Markets Cash Cows Growth Leaders ETF | ARCX:EAFG | 19.17 | USD |
| INVESCO S&P SMALLCAP 600 PUR | ARCX:RZG | 50.20 | USD |
| Capital Group Growth ETF Capital Group Growth ETF | ARCX:CGGR | 37.69 | USD |
| Invesco Dynamic Large Cap Growth ETF | XNYS:PWB | 103.66 | USD |
| Natixis ETF Trust II Natixis Loomis Sayles Focused Growth ETF | ARCX:LSGR | 39.33 | USD |
| CLRBRDG LRG CAP GWTH ESG ETF | XNAS:LRGE | 76.46 | USD |
| NuShares ESG Mid-Cap Growth | BATS:NUMG | 48.73 | USD |
| T. Rowe Price Exchange-Traded Funds, Inc. T. Rowe Price Growth ETF | ARCX:TGRT | 38.38 | USD |
| Vanguard S&P Small-Cap 600 Growth ETF | ARCX:VIOG | 117.91 | USD |
| SoFi Next 500 | ARCX:SFYX | 14.72 | USD |
| Litman Gregory Funds Trust Polen Capital International Growth ETF | ARCX:PCIG | 9.29 | USD |
| WisdomTree U.S. MidCap Quality Growth Fund | XNAS:QMID | 27.62 | USD |
| T. Rowe Price Blue Chip Growth ETF | ARCX:TCHP | 42.74 | USD |
| iShares Morningstar Sm Growth | ARCX:ISCG | 50.13 | USD |
| iShares Trust iShares ESG Aware MSCI USA Growth ETF | BATS:EGUS | 45.17 | USD |
| iShares MSCI EAFE Growth ETF | BATS:EFG | 96.99 | USD |
| Invesco S&P Midcap 400 Pure Growth ETF | XNYS:RFG | 48.81 | USD |
| BlackRock Large Cap Growth ETF | XNAS:BGRO | 34.72 | USD |
| Gabelli Growth Innovators ETF | ARCX:GGRW | 30.43 | USD |
| Trust for Professional Managers Jensen Quality Growth ETF | ARCX:JGRW | 26.29 | USD |
| First Trust Multi Cap Growth AlphaDEX Fd | XNAS:FAD | 140.28 | USD |
| Capital Group Global Growth Equity ETF Capital Group Global Growth Equity ETF | ARCX:CGGO | 29.46 | USD |
| ISHARES FACTORS US GWTH STYL | BATS:GARP | 56.68 | USD |
| AOT Growth and Innovation ETF | XNAS:AOTG | 45.54 | USD |
| American Century Focused Dynamic Growth ETF | ARCX:FDG | 105.80 | USD |
| Level Four Large Cap Growth Active ETF | XNAS:LGRO | 35.38 | USD |
| WisdomTree U.S. SmallCap Quality Growth Fund | XNAS:QSML | 27.62 | USD |
| IQ MacKay Municipal Insured ETF IQ Winslow Focused Large Cap Growth ETF | ARCX:IWFG | 46.67 | USD |
| iShares Russell Mid-Cap Growth | ARCX:IWP | 129.90 | USD |
| iShares Russell 1000 Growth ETF | ARCX:IWF | 407.33 | USD |
| Janus Small Cap Growth Alpha ETF | XNAS:JSML | 66.09 | USD |
| WisdomTree Trust WisdomTree U.S. Quality Growth Fund | ARCX:QGRW | 50.04 | USD |
| Strive 1000 Dividend Growth ETF | XNYS:STXD | 33.01 | USD |
| ETF Series Solutions LHA Market State Tactical Q ETF | BATS:MSTQ | 34.35 | USD |
| Vanguard S&P Mid-Cap 400 Growth ETF | ARCX:IVOG | 114.55 | USD |
| Motley Fool Mid-Cap Growth ETF | BATS:TMFM | 26.13 | USD |
| Vanguard Russell 2000 Growth ETF | XNAS:VTWG | 212.76 | USD |
| Brookstone Intermediate Bond ETF Brookstone Growth Stock ETF | BATS:BAMG | 35.22 | USD |
| Harbor ETF Trust Harbor Long-Term Growers ETF | XNYS:WINN | 27.58 | USD |
| Fidelity Growth Opportunities ETF | BATS:FFLG | 25.49 | USD |
| Fidelity Covington Trust Fidelity Enhanced Large Cap Growth ETF | ARCX:FELG | 35.82 | USD |
| iShares Morningstar Lg Growth | ARCX:ILCG | 90.99 | USD |
| Sterling Capital Focus Equity ETF | ARCX:LCG | 30.34 | USD |
| iShares S&P Small-Cap 600 Growth | XNAS:IJT | 136.90 | USD |