Last updated: July 2026

This article is for informational purposes only and is not investment advice. See our full Disclaimer for details.

Growth ETFs take a different bet than the broad, market-cap-weighted index funds covered in our [core ETF guide]. Instead of owning “the whole market,” a growth fund deliberately tilts toward companies expected to grow revenue and earnings faster than average — often at the cost of a lower current dividend yield and higher volatility.

That tilt has paid off strongly over the past decade, largely thanks to the outsized performance of large technology and AI-adjacent companies. Whether that continues is impossible to predict with certainty, which is exactly why understanding what you’re actually buying in a growth ETF matters more than chasing last year’s returns. This guide compares six of the most widely held growth funds, from broad, low-cost index options to a concentrated, actively managed pick at the far end of the risk spectrum.

New to ETFs? Our [What Is an ETF?] guide covers the basics before you dive into fund-specific comparisons.

How We Evaluate Growth ETFs

For each fund, we reviewed the underlying index or strategy, expense ratio, sector concentration, number of holdings, and historical performance context, sourced from each issuer’s official fund page and public ETF data providers. Growth funds vary more in methodology than most people assume — some select by projected earnings growth, some simply track a market-cap-weighted growth index, and some are actively managed with no index at all. We flagged those differences fund by fund below.

Quick Comparison Table

ETF	Approach	Expense Ratio	Approx. Holdings	Tech Weighting
QQQ	Nasdaq-100 index	~0.20%	~100	~49%
QQQM	Nasdaq-100 index (low-cost share class)	0.15%	~100	~49%
VUG	Broad large-cap growth index	0.04%	~180	~50%
SCHG	Multi-factor growth screen	0.04%	~250	~44%
IWY	Mega-cap growth (Russell Top 200 Growth)	0.20%	~200	High
ARKK	Actively managed, thematic innovation	~0.75%	~30–40	Concentrated, non-index

Figures are approximate and change regularly as funds rebalance. Always confirm current expense ratios, holdings, and sector weightings on each issuer’s official fund page before investing.

1. Invesco QQQ Trust (QQQ) — Best for Concentrated Tech and AI Exposure

Tracks: Nasdaq-100 Index

QQQ is the most recognizable growth ETF on the market, tracking the 100 largest non-financial companies listed on the Nasdaq. Roughly half the fund is concentrated in information technology, with meaningful additional weight toward companies tied to the semiconductor and AI supply chain — names like Nvidia, Applied Materials, Lam Research, and KLA sit alongside mega-cap holdings like Apple and Microsoft.

Worth knowing: QQQ’s 0.20% expense ratio is notably higher than the broad growth alternatives below, and its heavy tech concentration means it can swing more sharply than a more diversified growth fund in either direction. QQQ also carries the deepest, most liquid options market among growth ETFs, which is part of why active traders favor it specifically.

Best for: Investors who specifically want concentrated exposure to large-cap technology and AI-adjacent companies and are comfortable with the added volatility that concentration brings.

2. Invesco NASDAQ 100 ETF (QQQM) — QQQ’s Lower-Cost Sibling

Tracks: Nasdaq-100 Index (identical to QQQ)

QQQM holds essentially the same portfolio as QQQ but at a lower 0.15% expense ratio, aimed at buy-and-hold investors rather than active traders. The trade-off is lower trading volume and a less developed options market — a non-issue for most long-term investors, but relevant if you plan to trade options against your position.

Worth knowing: If you’re simply looking to hold Nasdaq-100 exposure long term rather than trade around it actively, QQQM’s lower fee makes it the more cost-efficient version of essentially the same fund.

Best for: Long-term, buy-and-hold investors who want Nasdaq-100 exposure without paying QQQ’s slightly higher fee for options liquidity they don’t need.

3. Vanguard Growth ETF (VUG) — Best Low-Cost, Broadly Diversified Growth Fund

Tracks: CRSP US Large Cap Growth Index

VUG takes a broader approach than QQQ, screening across all major U.S. exchanges (not just Nasdaq-listed companies) for large-cap growth characteristics. That results in a fund that still leans heavily toward technology (roughly half the fund) but also includes meaningful positions in companies like Eli Lilly, Visa, and Mastercard — names that wouldn’t necessarily show up in a Nasdaq-100-only fund.

Worth knowing: At a 0.04% expense ratio, VUG is dramatically cheaper than QQQ while tracking a broader universe of growth companies. Its performance has generally moved in a similar direction to QQQ, given the shared heavy tech weighting, but the two funds are not identical, and VUG’s inclusion of non-Nasdaq companies means its returns can diverge from QQQ’s during periods when Nasdaq-specific leadership is unusually strong or weak.

Best for: Investors who want low-cost, diversified large-cap growth exposure without paying for QQQ’s Nasdaq-specific concentration or higher fee.

4. Schwab U.S. Large-Cap Growth ETF (SCHG) — Best for a Quality-Focused Growth Screen

Tracks: Dow Jones U.S. Large-Cap Growth Total Stock Market Index

SCHG applies a more explicit, multi-factor growth screen than QQQ or VUG, selecting companies based on projected and historical earnings growth, sales growth, and return on equity, rather than simply tracking a market-cap-weighted growth index. That process has resulted in a somewhat more balanced sector mix — technology sits around 44% of the fund, compared to roughly 49-50% for QQQ and VUG, with meaningful allocations to healthcare and financials on top.

Worth knowing: SCHG matches VUG’s rock-bottom 0.04% expense ratio while holding a larger number of companies (around 250, compared to VUG’s roughly 180), giving it slightly broader diversification within the same low-cost structure. Its long-term track record has been competitive with the other passive growth funds on this list.

Best for: Investors who want a diversified, low-cost growth fund with a more explicit earnings-quality screen rather than a simpler market-cap-weighted growth index.

5. iShares Russell Top 200 Growth ETF (IWY) — Most Concentrated Mega-Cap Growth Pick

Tracks: Russell Top 200 Growth Index

IWY narrows the growth universe further than any other fund on this list, focusing specifically on the 200 largest U.S. growth-oriented companies. The result is a fund even more concentrated in mega-cap names than QQQ, VUG, or SCHG.

Worth knowing: At a 0.20% expense ratio, IWY costs the same as QQQ but with a different, even narrower selection universe. Because it’s so heavily weighted toward the very largest growth companies, its performance tends to be closely tied to how that specific handful of mega-cap names is performing at any given time — arguably the most concentrated bet among the passive funds covered here.

Best for: Investors who specifically want maximum concentration in the largest U.S. growth companies, understanding that this means less diversification than VUG or SCHG.

6. ARK Innovation ETF (ARKK) — Highest-Risk, Actively Managed Pick

Strategy: Actively managed, concentrated in disruptive innovation themes

ARKK is structurally different from every other fund on this list. Instead of tracking an index, it’s actively managed by ARK Invest, holding a concentrated portfolio of roughly 30-40 companies the fund’s managers believe represent “disruptive innovation” — spanning genomics, robotics, artificial intelligence, and other emerging themes, without the market-cap weighting or broad diversification of an index fund.

Worth knowing: This is by a wide margin the highest-risk fund on this list. ARKK’s concentrated, actively managed approach has produced some of the most dramatic gains and losses of any major ETF over the past several years — both far above and far below what QQQ, VUG, or SCHG have delivered in the same periods. Its expense ratio, around 0.75%, is also many times higher than the passive growth funds above, reflecting its active management structure.

Best for: Investors who understand and specifically accept significantly higher volatility and concentration risk in exchange for exposure to a smaller number of higher-conviction, thematic growth bets — generally as a small satellite position rather than a core portfolio holding.

Growth vs. Broad Market: What’s the Actual Trade-Off?

It’s worth being direct about what a “growth tilt” actually means mechanically: you’re increasing your exposure to a smaller number of sectors and companies — usually technology — relative to a broad fund like VOO or VTI, which already holds those same companies but at market-cap weights alongside everything else.

That concentration is exactly why growth funds have outperformed broad index funds during periods when large tech and AI-adjacent companies have led the market, and it’s also why they can underperform more sharply when market leadership rotates toward other sectors. A growth ETF isn’t a “better” version of a broad index fund — it’s a more concentrated bet on a specific segment of the market continuing to lead.

Risks Specific to Growth ETFs

Beyond general market risk, growth funds carry a few risks worth understanding specifically:

• Valuation risk — Growth companies often trade at higher valuations relative to current earnings, which can mean sharper price declines if growth expectations aren’t met.
• Sector concentration — Most growth ETFs on this list carry heavy technology weightings, meaning a downturn specific to that sector affects these funds more than a broad market fund.
• Lower current income — Growth companies typically reinvest profits rather than pay dividends, so growth ETFs generally yield less than dividend-focused or broad-market funds.
• Active management risk (ARKK specifically) — Funds without an index to track depend entirely on manager decisions, which can diverge significantly, in either direction, from how the broader market performs.

Which Growth ETF Fits Your Situation?

Want maximum, concentrated exposure to tech and AI-adjacent companies: QQQ (or QQQM for lower ongoing cost if you’re not trading options).

Want a low-cost, broadly diversified growth fund as a core holding: VUG or SCHG — both charge 0.04% and offer more sector balance than QQQ.

Want the narrowest possible bet on the very largest growth companies: IWY, understanding that this means less diversification than the alternatives above.

Understand and accept significantly higher risk for a shot at outsized returns from a smaller, thematic portfolio: ARKK — sized as a smaller satellite position rather than a core holding, given its volatility.

For a look at how a growth-focused fund compares directly against a broad core index fund, see our [QQQ vs VOO] comparison.

Frequently Asked Questions

Are growth ETFs riskier than index funds like VOO or VTI? Generally yes, in the sense that most growth ETFs carry more sector concentration (typically in technology) than a broad market fund. That concentration has driven strong historical returns during tech-led markets, but it also means growth funds can underperform more sharply when market leadership shifts elsewhere.

What’s the difference between QQQ and VUG? QQQ tracks only Nasdaq-listed companies via the Nasdaq-100 Index, resulting in a narrower, more tech-heavy fund. VUG screens for growth characteristics across all major U.S. exchanges, resulting in a broader, still tech-heavy but somewhat more diversified fund, at a considerably lower expense ratio.

Is ARKK a good long-term investment? That depends entirely on your risk tolerance and how you’re using it within a broader portfolio. ARKK’s actively managed, concentrated approach has produced significantly more volatile results — in both directions — than the passive index-based growth funds on this list. It is not comparable in risk profile to a broad, diversified fund like QQQ, VUG, or SCHG.

Should I choose a growth ETF or a broad index fund like VOO? This isn’t necessarily an either/or choice. Many investors hold a broad core index fund as the foundation of their portfolio and add a smaller allocation to a growth-focused fund on top, rather than replacing one with the other entirely. Your own allocation depends on your goals and risk tolerance.

Do growth ETFs pay dividends? Some do, but typically at a lower yield than broad-market or dividend-focused funds, since growth companies tend to reinvest profits rather than distribute them as dividends. Don’t expect meaningful income from a growth-focused ETF.

Which growth ETF has the lowest fee? VUG and SCHG both charge a 0.04% expense ratio, among the lowest of any actively growth-tilted fund, and dramatically lower than QQQ’s roughly 0.20% or ARKK’s roughly 0.75%.

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This article reflects publicly available fund data as of the “last updated” date above and is provided for informational purposes only — it is not a recommendation to buy or sell any security. Expense ratios, holdings, sector weightings, and performance figures change over time; always verify current data directly on each issuer’s official fund page before making an investment decision. Read our full Disclaimer and Privacy Policy for more information.