The Best Growth Stock ETF to Invest $100 in Right Now

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2 hours ago

Key Points
It's hard to know which stocks will be tomorrow's winners, so it makes sense to buy a bundle of them.
The Vanguard Growth ETF boasts a great track record and ultra-low fees to its investors.
Do remember that in market downturns, growth stocks tend to fall harder than the overall market.
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If you're like many investors, you either own or want to own the "Magnificent Seven" stocks, which are Apple, Amazon.com, (Google parent) Alphabet, (Facebook parent) Meta Platforms, Microsoft, Nvidia, and Tesla.
You might also want to own companies that could become Magnificent-Seven-like -- in other words, terrific growth stocks. But which companies are the next great investments? It can be hard to know, which is why it's smart to buy a bundle of promising stocks, spreading your risk and opportunity around.
Consider, therefore, investing in the Vanguard Growth ETF (NYSEMKT: VUG), which you can do with as little as $100. (To clarify, a single share recently went for $463, so if you only had $100 to invest, you'd need to buy a fraction of a share, which some good brokerages allow you to do.) An exchange-traded fund (ETF) is a fund that trades like a stock.
Meet the Vanguard Growth ETF
The Vanguard Growth ETF tracks the CRSP U.S. Large Cap Growth Index, which is focused on large-cap companies growing at a faster-than-average clip, and the ETF aims to deliver roughly the same returns, minus its low fees. Specifically, its expense ratio (annual fee) is just 0.04%, meaning that you'll be charged a whopping $4 per year for every $10,000 you have invested in the fund.
The ETF held 165 stocks, as of June 30, per Vanguard, with 60% of assets in the technology sector, followed by 19% in the consumer discretionary sector. Here are the top 10 holdings, which together made up about 59% of total assets:
Stock
Weight in ETF
Microsoft
11.76%
Nvidia
11.63%
Apple
9.71%
Amazon.com
6.53%
Meta Platforms
4.57%
Alphabet Class A
4.26%
Alphabet Class C
3.17%
Eli Lilly
2.87%
Broadcom
2.55%
Tesla
2.19%
Source: Vanguard.com, as of June 30.
You can see that all the Magnificent Seven stocks are there -- and among the top holdings. And given that these 10 holdings make up more than half the ETF's value, it's clear that the other 155 stocks will be relatively minor holdings for the ETF -- and its shareholders. Still, those top 10 companies are in the top 10 because they grew to huge sizes, and it's not crazy to let your winners run and keep winning.
This ETF and its more well-known fellow index fund, the S&P 500 index fund, are, like lots of others, market-cap-weighted, meaning that the bigger the component company, the more influence it will wield on the index. That's why the top 10 companies above make up so much of the Vanguard Growth ETF's value -- because they have such hefty market caps.
If you're in the market for diversification with less concentration, you might look for a good equal-weighted ETF, such as the Invesco S&P 500 Equal Weight ETF, which holds each of its 500-some components in roughly equal proportion. The Invesco equal-weight ETF's top-10 holdings would, therefore, make up only about 2% or 3% of the overall ETF value.
How has the Vanguard Growth ETF performed?
Here's how the Vanguard Growth ETF would have rewarded you over several recent periods. I'll compare its numbers to those of a low-fee S&P 500 index fund, too, and you'll see that it outperformed the S&P index fund handily:
Time period
Vanguard Growth ETF
Vanguard S&P 500 ETF
Past 3 years
21.22%
16.30%
Past 5 years
16.47%
15.46%
Past 10 years
16.58%
13.89%
Past 15 years
17.00%
N/A
Source: Morningstar.com, as of August 12, 2025.
There's no guarantee that it will always outperform, though, and it's good to remember that since growth stocks tend to fall harder in market downturns, there may be years when it really underperforms. For example, in 2022, when the S&P 500 ETF dropped by around 18%, the Vanguard Growth ETF dropped by 33%. Ouch!
Still, long-term investors have enjoyed solid overall gains, and it's rarely good to focus on any one year. So go ahead and consider the Vanguard Growth ETF for your growth-stock needs. But perhaps complement it with some other solid index ETFs.
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Selena Maranjian has positions in Alphabet, Amazon, Apple, Broadcom, Meta Platforms, Microsoft, Nvidia, and Vanguard Index Funds-Vanguard Growth ETF. The Motley Fool has positions in and recommends Alphabet, Amazon, Apple, Meta Platforms, Microsoft, Nvidia, Tesla, and Vanguard Index Funds-Vanguard Growth ETF. The Motley Fool recommends Broadcom and recommends the following options: long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft. The Motley Fool has a disclosure policy.
The Best Growth Stock ETF to Invest $100 in Right Now was originally published by The Motley Fool