Best Growth ETFs for Q1 2020

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Growth exchange-traded funds (ETFs) are one of two broad categories of ETFs, the other one being value ETFs. Growth ETFs are designed to invest in a basket of stocks whose underlying companies have the potential for fast growth, as opposed to stocks whose prices are relatively undervalued. Growth companies in these funds include Microsoft Corp. (MSFT), Intel Corp. (INTC), Cisco Systems Inc. (CSCO), and Salesforce.com Inc. (CRM). While these ETFs can provide above average returns, they also carry more risk because fast growth tends to be accompanied with higher volatility, especially during times of economic weakness. These ETFs may not be the best vehicles for investors looking for regular income. That’s because many growth companies reinvest earnings in future growth rather than pay dividends to shareholders.

The growth ETF universe is comprised of about 189 distinct ETFs, excluding inverse and leveraged ETFs. The best-performing growth ETF for Q1 2020, based on performance over the past year, is the Technology Select Sector SPDR Fund (XLK). We examine the top 3 best growth ETFs below. All numbers in this story are as of February 12, 2020.

  • Performance over 1-Year: 50.1%
  • Expense Ratio: 0.13%
  • Annual Dividend Yield: 1.05%
  • 3-Month Average Daily Volume: 8,876,730
  • Assets Under Management: $28,505.3 million
  • Inception Date: December 16, 1998
  • Issuing Company: State Street SPDR

XLK is a large-cap ETF focused on the U.S. technology sector and follows a strategy of investing in growth stocks. The fund’s top three holdings include Microsoft Corp. (MSFT), a multinational technology company; Apple Inc. (AAPL), a multinational technology company; and Visa Inc. (V), a multinational financial services company.

  • Performance over 1-Year: 49.1%
  • Expense Ratio: 0.79%
  • Annual Dividend Yield: N/A
  • 3-Month Average Daily Volume: 29,762
  • Assets Under Management: $38.1 million
  • Inception Date: December 16, 2014
  • Issuing Company: Virtus

BBC is a multi-cap ETF focused on the U.S. health and biotechnology sector. The fund follows a strategy of investing in growth stocks. The ETF’s top three holdings include Axsome Therapeutics Inc. (AXSM), a biopharmaceutical company; CEL-SCI Corp. (CVM), a biotechnology company; and Intra-Cellular Therapies Inc. (ITCI), a biopharmaceutical research and development company.

  • Performance over 1-Year: 46.5%
  • Expense Ratio: 0.10%
  • Annual Dividend Yield: 1.01%
  • 3-Month Average Daily Volume: 592,824
  • Assets Under Management: $28,519.3 million
  • Inception Date: January 30, 2004
  • Issuing Company: Vanguard

VGT is a large-cap ETF focused on the U.S. technology sector and follows a strategy of investing in growth stocks. The fund’s top three holdings include Apple Inc. (AAPL), Microsoft Corp. (MSFT), and Visa Inc. (V).

Source: Investopedia

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