7 Great Growth ETFs to Get Your Portfolio Going

These growth ETFs provide exposure to the higher-risk investing style while mitigating some of the headaches associated with it.

business growth concept
(Image credit: Getty Images)

While 2021 began as the year of value, growth stocks and growth exchange-traded funds (ETFs) have been making their way back into favor in recent weeks.

Growth investing is one that continues to capture many investors' attention. While there are no hard and fast rules for the style, incorporating growth stocks into your portfolio involves finding names that are expanding faster than their sector peers or broader market averages.

Typically, these stocks are smaller in terms of market cap, but they don't have to be. Measures of revenue growth or predicted gains to earnings per share (EPS) are often the chief metrics that growth investors focus on.

Capital gains are another factor investors in growth stocks and growth ETFs keep an eye on, as dividends are often nonexistent for many names within the category. Many growth firms tend to retain whatever earnings they have and plow them back into building the business.

There are certainly drawbacks to growth investing. For one, you never really know when the bus is going to run out of gas. It is not uncommon for growth stocks to eventually start to slow down and mature, but some do this more quickly than others and this loss of momentum can rapidly hamper your returns.

One way to protect investments against these sharp drops is to adopt a broad approach. Growth ETFs provide immediate diversification by spreading out risk across dozens or even hundreds of stocks, mitigating some of the headaches that accompany this investing style.

Here are 7 growth ETFs that act as one-stop shops for those looking to capitalize on growth investing. A few of these selections deal primarily with the broader growth style of investing, while a few home in on specific explosive trends.

Disclaimer

Data is as of July 20. Dividend yields represent the trailing 12-month yield, which is a standard measure for equity funds.

Contributing Writer, Kiplinger.com