10 Best ETFs for Large-Cap Stock Growth
The biggest and the best on the market.
Who says large-capitalization stocks can't grow? Amazon.com (ticker: AMZN) doubled in 2015. Facebook (FB) and Alphabet (GOOG, GOOGL) returned about 35 percent in the past year. However, these same large caps can suffer from massive swoons -- Apple (AAPL) is down 14 percent. Because trying to cherry-pick a few large-cap stocks could cause you to miss out on winners, one solution is to buy exchange-traded funds that are invested in hundreds of large-cap growth stocks. These are the best of the bunch, according to U.S. News & World Report.
#10: iShares MSCI USA Momentum Factor ETF (MTUM)
Well, if you wanted growth, MTUM has growth. Or, more specifically, it has momentum. This iShares fund provides exposure to more than 100 large-cap stocks that are singled out for their price momentum -- or, in other words, it chases large, hot-moving stocks higher while trying to keep away the laggards. MTUM features top holdings like hot growth names Facebook and Amazon, as well as a dirt-cheap expense ratio.
Expenses: 0.15 percent, or $15 annually for every $10,000 invested
#9: iShares Russell 1000 Growth ETF (IWF)
The iShares Russell 1000 Growth ETF is a more traditional growth fund, focusing on a subset of the 1,000 largest American companies that are expected to post above-average earnings improvement compared to the rest of the market. IWF is a fairly diverse fund in that it holds 635 large- and mid-cap stocks, though nearly half the fund is invested in just two sectors -- information technology and consumer discretionary. In fact, the very top end of IWF is extremely tech-heavy, featuring Apple, Microsoft Corp. (MSFT), Facebook, Amazon and Alphabet.
Expenses: 0.2 percent
#8: Vanguard S&P 500 Growth ETF (VOOG)
The VOOG slices up another major index, this time the Standard & Poor's 500 index, to extract its growthy goodness. However, the result is actually a more exaggerated version of the IWF, with a 30 percent-plus allocation to tech stocks, with nearly 20 percent of that in its top five weightings -- AAPL, AMZN, FB, GOOGL and MSFT, just like IWF. And it does this across roughly half the same number of holdings. The upside? It slightly outperforms IWF over a number of time periods, and it's cheaper.
Expenses: 0.15 percent
#7: iShares Morningstar Large-Cap Growth ETF (JKE)
The JKE is the third iShares large-cap growth fund on the list, and there's not much variance here, either. Notable fund characteristics include a nearly 35 percent weighting in tech and 26 percent in consumer discretionary, as well as a significant overweight in Apple, which is the top holding at a whopping 10 percent of the whole fund. It also has the dubious distinction of being the most expensive of iShares' five large growth funds on this list.
Expenses: 0.25 percent
#6: iShares Russell Top 200 Growth ETF (IWY)
The IWY is a truly mega-cap fund, investing in the most growth-heavy stocks among the 200 largest companies in the U.S., resulting in an average market cap of more than $110 billion. Of course, the fund isn't that selective, holding more than half the index at 137 stocks. It also has an investment blend you're sure to be familiar with by now -- heavy holdings in IT and consumer stocks, with Apple, Microsoft, Facebook, Amazon and Alphabet making up the top 25. To its credit, IWY is the only iShares large growth fund to post a positive return over the past year.
Expenses: 0.2 percent
#5: Vanguard Growth ETF (VUG)
The Vanguard Growth ETF is the biggest fund on this list in assets at nearly $47 billion under management -- greater than the combined assets of all the other ETFs we're featuring today. That's likely in part thanks to its bargain-basement expenses of just 9 basis points. VUG also features a relatively balanced set of holdings. Sure, IT and consumer stocks make up roughly half of the fund, but four other sectors enjoy double-digit considerations. Coca-Cola (KO) pokes its head into an otherwise tech-centric top five holdings.
Expenses: 0.09 percent
#4: Vanguard Mega Cap Growth ETF (MGK)
MGK is another biggest-of-the-biggest mega-cap growth fund that sports an average market cap of $87 billion among its 149 holdings. And while tech (32 percent) and consumer discretionary (18 percent) form the familiar 1-2 combo by sector, health care is actually a very close third to consumers at 17.4 percent of the fund. MGK sports the same top five as VUG, just in higher concentrations. That works to its benefit though, as MGK has slightly outperformed VUG over most time periods.
Expenses: 0.09 percent
#3: Schwab US Large-Cap Growth ETF (SCHG)
Schwab's lone participant on this list sticks out in a pair of ways. For one, it's the cheapest ETF at a mere 6 basis points annually. Also, it excludes popular top-five holding Microsoft entirely from its stock list; replacing it at No. 2 is Warren Buffett's Berkshire Hathaway (BRK.A, BRK.B). Past that, SCHW follows the same routine -- tech is tops, then consumer stocks and health care.
Expenses: 0.06 percent
#2: iShares Core US Growth (IUSG)
The majority of IUSG's appeal comes from its cost -- at 7 basis points annually, it's the cheapest of iShares' large-cap growth ETFs. Otherwise, there's not much setting it apart from its brethren. Heaviest weights are in tech and consumer discretionary, the Tech Five sit atop the IUSG's holdings, and performance-wise it sits in the middle of the pack, once you consider most standard time periods.
Expenses: 0.07 percent
#1: Vanguard Russell 1000 Growth ETF (VONG)
The VONG is most similar to the IWF in that its benchmark index is the Russell 1000 Growth index, but it does differ in a couple significant ways. Technology holdings aren't nearly as heavy, at 22 percent versus 28 percent in the IWF, and financials and utilities are better represented as a result. VONG also is a cheaper way to access the index by 8 basis points.
Expenses: 0.12 percent
Kyle Woodley is managing editor of InvestorPlace.com. Investing is his second love, with Ohio sports teams as his first. Naturally, this has warped his general perception of love, sparking (among other things) an unnatural affection for the Haddaway hit, "What Is Love?" Follow him on Twitter @kylewoodley.
