Investing in the stock market is one of the most effective ways to build long-term wealth, but the right investments are key to maximizing returns while limiting risk.
An exchange-traded fund (ETF) is a basket of securities combined into a single investment. Each fund can contain hundreds of stocks, and by investing in just one share of the ETF, you instantly own shares in all of those companies. This allows you to build a more diverse portfolio with little effort.
Growth ETFs are some of these funds and are designed to provide above-average returns over the long term. All the stocks in this type of his ETF have the potential for faster-than-average growth and should theoretically be able to outperform the market over time.
However, not all growth ETFs are created equal, and some options are better than others. There are never guarantees when it comes to the stock market, but with these three funds, he could potentially earn more than $500,000 on a $200 monthly investment with little effort.
1. Vanguard Growth ETF
of Vanguard Growth ETF (VUG -0.96%) contains 208 stocks with above-average growth potential. One of the big benefits of this particular fund is that it has a healthy mix of blue-chip stocks and up-and-coming companies.
The top 10 stocks in the fund account for approximately 50% of the total composition. These stocks are from giant companies such as: apple, Amazon, Nvidia, microsoftand visa. The other half of the fund consists of small-cap stocks.
This combination allows you to maximize returns while reducing risk. Although blue-chip stocks can experience slower growth, they are also generally solid and stable investments. Small-cap stocks, on the other hand, carry more risk but have a higher potential for explosive growth.
Over the past 10 years, this Vanguard fund has delivered an average annual return of 14.74%. For example, if you invest $200 per month and earn an average annual rate of return of 14%, here's the approximate amount you can accumulate over time:
| years | Total portfolio amount |
|---|---|
| 20 | $218,000 |
| twenty five | $436,000 |
| 30 | $856,000 |
| 35 | $1,665,000 |
Data source: Author calculations via investor.gov.
It takes 25 to 30 years of consistent investing to reach $500,000 in total savings. But the longer your money can grow (or the more you can contribute each month), the more income you can earn.
2. Schwab U.S. Large Cap Growth ETF
of Schwab U.S. Large Cap Growth ETF (SCHG -1.11%) contains 251 stocks with above-average growth potential. Similar to the Vanguard Growth ETF, the top 10 stocks account for about half of the total composition. However, it's a bit more diversified in terms of how these stocks are distributed across different industries.
About 45% of Schwab's U.S. Large-Cap Growth ETF's holdings come from the tech sector, compared to about 56% for the Vanguard ETF. It's normal for growth ETFs to focus on tech stocks, but the more a fund relies on a particular industry, the more risky it generally is. Schwab's more diverse approach helps limit risk.
This ETF has earned an average annual return of 15.46% over the past 10 years, which is slightly higher than the Vanguard Growth ETF. If you invest $200 per month at an average annual rate of return of 15%, here's approximately how it will grow over time.
| years | Total portfolio amount |
|---|---|
| 20 | $246,000 |
| twenty five | $511,000 |
| 30 | $1,043,000 |
| 35 | $2,115,000 |
Data source: Author calculations via investor.gov.
3. Invesco QQQ
Invesco QQQ (QQQ -1.44%) is the least diversified of the three ETFs on this list, containing only 101 stocks, almost 58% of which are from the tech sector. However, it is also a strong investment with significantly higher average annual returns than his other two funds.
Over the past 10 years, QQQ has returned an average of 17.66% per year. Here's a rough idea of how $200 invested each month will grow over time at an average annual rate of return of 17%.
| years | Total portfolio amount |
|---|---|
| 20 | $312,000 |
| twenty five | $701,000 |
| 30 | $1,554,000 |
| 35 | $3,424,000 |
Data source: Author calculations via investor.gov.
However, there are important caveats to this ETF. Although we have generated exceptional returns over the past 10 years, there is no guarantee that we will be able to maintain these returns over the long term.
In general, growth ETFs are often more volatile than many other types of investments, and growth stocks typically involve more risk. Even “safe” growth stocks tend to experience more extreme ups and downs in the short term than more established growth stocks.
While ETFs like QQQ can achieve impressive returns, it's important to be aware of the risks associated with those potential returns. The Fund may or may not continue to generate similar returns in the future compared to the past. Even if there is explosive growth, it can be very volatile in the short term. Before you buy, make sure you're ready for that level of risk.
Investing in growth ETFs is a great way to build wealth, but numbers are only part of the equation. This type of investment is often more volatile than other ETFs, so it's important to choose wisely based on your risk tolerance. As part of a well-diversified portfolio, the right growth ETFs can significantly increase your savings.
John Mackey, former CEO of Amazon subsidiary Whole Foods Market, is a member of the Motley Fool's board of directors. Katie Brockman has a position in the Vanguard Index Fund Vanguard Growth ETF. The Motley Fool has positions in and recommends Amazon, Apple, Microsoft, Nvidia, Vanguard Index Funds-Vanguard Growth ETF, and Visa. The Motley Fool recommends the following options: His January 2026 $395 long call on Microsoft and his January 2026 $405 short call on Microsoft. The Motley Fool has a disclosure policy.
