5 top growth funds to invest in long-term Focusing on growth stocks was one of the best-performing investment strategies of the previous ten years. These are the shares of businesses that, in comparison to their sector rivals, are anticipated to produce larger sales, profitability, and cash flow. As a result, amid advantageous economic circumstances, such as a bull market with low interest rates, their share values might increase quickly.
Invesco NASDAQ 100 ETF
The Nasdaq 100, which follows the 101 biggest non-financial businesses listed on the Nasdaq stock market, is a well-liked passive indexing choice for American growth investors. The technology sector accounts for 50% of the weighting in this index, and its top holdings include megacaps like Meta Platforms Inc. (META), Apple Inc. (AAPL), Amazon.com Inc. (AMZN), Netflix Inc. (NFLX), and Alphabet Inc. (GOOG, GOOGL). The Nasdaq-100 index has rebounded regularly to offer big bursts of outperformance, returning an annualised 15.9% over the previous 10 years despite being vulnerable to significant drawdowns, such as during the 2000 dot-com boom and the 2008 financial crisis. QQQM, which has a 0.15% charge, is a wonderful method to purchase and hold the Nasdaq 100 for the long term.
Vanguard Growth ETF
Given that it doesn’t include banking equities and those that aren’t traded on the Nasdaq stock market, the Nasdaq 100 may not be to certain investors’ tastes. VUG, which passively follows the CRSP US Large Cap Growth Index, is a more diversified choice. Apple, Meta, and Alphabet once more figure among the top holdings of VUG, which like QQQM has a 49% lean toward the technology sector. Nvidia Corp., Tesla Inc., and Microsoft Corp. are a few more prominent top holdings (NVDA). The ETF’s low dividends make it an excellent investment for taxable accounts. VUG has an expenditure ratio that is only 0.04%, making it less expensive than QQQM.
Fidelity Large Cap Growth Index Fund
Mutual funds may be preferred over ETFs by investors who want the flexibility of automating contributions in any size. Mutual funds are sometimes the sole choice for people investing in a 401(k) plan offered by their employer. FSPGX, which follows the Russell 1000 Growth Index, is a fantastic choice for growth investors. This mutual fund has a 44% overweight in the technology sector and contains 524 large-cap U.S. companies. Given its larger number of assets, which includes financial sector firms that QQQM excludes, FSPGX offers stronger diversification in comparison to ETFs like QQQM. FSPGX has an extremely low expenditure ratio of 0.035% for fees.
Fidelity Growth Company Fund
Instead of purchasing FSPGX, investors that want actively managed funds can purchase FDGRX. Fidelity Management & Research Co. actively manages FDGRX, purchasing U.S. and foreign equities it feels have the potential for above-average growth based on earnings and revenue numbers. To make their selections, the fund’s managers use basic research of a company’s financial situation, industry position, and overall market and economic conditions. Given that FDGRX has outperformed its benchmark, the Russell 3000 Growth index, by 15.5% annualised over the past 10 years, active management appears to have paid off.