10 Growth ETFs to Buy for Backside Protection, Too

Growth exchange-traded funds (ETFs) are as straightforward as they sound: They’re portfolios of growth stocks.

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Growth exchange-traded funds (ETFs) are as straightforward as they sound: They’re portfolios of growth stocks.

By definition, a growth stock is any company with an above-average growth profile. In other words, they are companies whose revenues and earnings are expanding faster than the market average. They also often pay little or no dividends, opting instead to reinvest their cash flow in the business to maintain their growth.

But they have their pitfalls; namely, when growth slows. Recently, outdoor gear maker Canada Goose (GOOS (opens in new tab)) lost more than 30% of its value in a single day after reporting lower-than-expected fourth-quarter earnings. Although revenues rocketed 40% higher year-over-year and profits jumped 20%, it still marked the company’s slowest growth in eight quarters, prompting fears its tremendous growth was coming to an end. Whether that’s true is up for debate. But if you owned GOOS stock, you couldn’t have been pleased about the one-day plunge.

This is why owning growth ETFs makes so much sense. By diversifying your growth-stock holdings through a fund, you’re protecting your downside.

Here are 10 growth ETFs to buy if you want to cut back on the risk of owning individual shares.

Data is as of June 19. Market value and expenses from Morningstar. Dividend yields represent the trailing 12-month yield, which is a standard measure for equity funds.

Will Ashworth
Contributing Writer, Kiplinger.com

Will has written professionally for investment and finance publications in both the U.S. and Canada since 2004. A native of Toronto, Canada, his sole objective is to help people become better and more informed investors. Fascinated by how companies make money, he's a keen student of business history. Married and now living in Halifax, Nova Scotia, he's also got an interest in equity and debt crowdfunding.