After the Nasdaq Composite hit an all-time high this week, The Motley Fool named five growth ETFs it recommends: Invesco QQQ, Vanguard Morningstar Growth, Schwab U.S. Large-Cap Growth, Vanguard Information Technology and Global X AI & Technology.
Motley Fool says growth stocks, represented by Vanguard Morningstar Growth versus Vanguard Value, outperformed in 14 of the 17 years since the 2008 bear market. It reports average annual returns of 20.8% for QQQ, 17.8% for Vanguard Morningstar Growth (period unspecified), 18.7% for Schwab U.S. Large-Cap Growth and 24.5% for Vanguard Information Technology over 10 years, plus nearly 33% a year for Global X AI & Technology over three years. QQQ beat the S&P 500 in over 88% of rolling 12-month periods over the past decade, the article says.
QQQ tracks the Nasdaq-100, an index of the 100 largest non-financial Nasdaq-listed companies. The Vanguard fund holds 147 stocks, with Nvidia, Apple, Microsoft, Alphabet and Amazon together making up more than half its portfolio; Schwab’s fund holds about 190. Nvidia and Apple account for about 17.7% and 15.8% of Vanguard Information Technology, respectively, while more than 30% of Global X AI & Technology is in international stocks. The article lists expense ratios of 0.03% for Vanguard Growth, 0.04% for Schwab and 0.09% for Vanguard Information Technology.
