Key takeaways

  • The iShares S&P 500 Growth ETF (IVW) and Fidelity Nasdaq Composite Index ETF (ONEQ) have both delivered impressive returns exceeding 30% in the past year.
  • These ETFs have major holdings in tech giants such as Microsoft, Apple, Nvidia, and Amazon.
  • ETFs like IVW and ONEQ offer diversified exposure to large-cap U.S. companies known for their growth potential.
  • ETFs generally have lower fees compared to actively managed funds, enhancing cost-effectiveness.

Growth ETFs (exchange-traded funds) focus on stocks with the potential for significant capital appreciation, targeting companies or sectors poised for above-average earnings and revenue growth. On the other hand, a composite index ETF tracks a composite index, which amalgamates the performance of various underlying indices or market segments.

This article delves into a growth ETF and a composite index ETF that have both generated over 30% returns in the past year.

iShares S&P 500 Growth ETF (IVW)

The iShares S&P 500 Growth ETF seeks to replicate the performance of the S&P 500(R) Growth Index, comprising prominent US companies recognised for their growth potential. These companies are expected to exhibit earnings growth exceeding that of the broader market. The ETF offers several advantages, including cost-effectiveness and tax efficiency.

Data source: iShares website; Image Source: © 2024 Krish Capital Pty.Ltd

As of June 30 2024, it has delivered a total return of 32.27% over the past year and 16.66% over the past five years. Information technology dominates its holdings, comprising 51.37% of the portfolio as of July 9 2024, with key positions in Microsoft, Apple, and Nvidia.

Average annual returns as of June 30 2024

Data source: iShares website; Image Source: © 2024 Krish Capital Pty.Ltd

Fidelity Nasdaq Composite Index ETF (ONEQ)

The ONEQ ETF follows a market-cap-weighted index of Nasdaq-listed companies. As of June 31 2024, the fund’s largest allocation is in the electronic technology sector followed by technology services. Notable holdings include Microsoft, Apple, Nvidia, and Amazon. As of July 10 2024, the ETF’s NAV has delivered a return of 13.21% over the past three months and 36.40% in the past year.

Data source: ETF website; Image Source: © 2024 Krish Capital Pty.Ltd

Data source: ETF website; Image Source: © 2024 Krish Capital Pty.Ltd

These ETFs provide exposure to a broad range of stocks within the S&P 500 Growth Index and Nasdaq Composite Index, respectively, spreading risk across multiple sectors. With consistent performance over the past several years, these ETFs have established a track record of stability and growth. However, investors should carefully consider their investment objectives, risk tolerance, and time horizon before investing in ETFs. Past performance is not a reliable indicator of future performance.