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Some growth ETFs are riskier than others, but all are designed to earn greater returns over the long term.
From tech-focused funds to mega-cap growth ETFs, these investments can supercharge your earnings.
However, it's important to consider your risk tolerance before buying.
Growth ETFs are designed to earn above-average returns over time, and the right fund can supercharge your earnings.
While there's no way to know where the market is headed in 2026, these three Vanguard ETFs have a history of outperforming the S&P 500 (SNPINDEX: ^GSPC) over several years. If they continue earning similar returns, there's a chance these ETFs could crush the market going forward.
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The Vanguard S&P 500 Growth ETF (NYSEMKT: VOOG) tracks the S&P 500. However, instead of including all stocks from the index, it only contains those with the highest potential for long-term growth. This increases the likelihood of earning higher-than-average returns over time.
In fact, over the past 10 years, this ETF has earned an average rate of return of 16.69% per year -- compared to the Vanguard S&P 500 ETF's (NYSEMKT: VOO) average annual return of 14.58% in that time.
The Vanguard S&P 500 Growth ETF leans heavily on tech stocks, which has helped fuel its faster growth over the past decade. If tech stocks continue thriving in the coming years, this fund could have even further to climb.
The Vanguard Mega Cap Growth ETF (NYSEMKT: MGK) is unique in that it only targets extremely large companies. While large-cap stocks have a market cap of more than $10 billion, mega-caps are generally defined as those with a market cap of at least $200 billion.
This ETF contains only 66 stocks, making it much more niche and less diversified than the S&P 500 Growth ETF. However, that narrower approach has also led to higher returns, as it's more focused on large, high-performing growth stocks.
Over the past 10 years, this ETF has earned an average rate of return of 18.08% per year. It's surged even more over the past three years, with a staggering 30.55% average annual return in that time. Just keep in mind that while its narrow approach can be an advantage in some ways, it can also lead to greater short-term volatility.
Investing in an industry-specific fund can be a smart way to gain exposure to a particular sector of the market, and the Vanguard Information Technology ETF (NYSEMKT: VGT) contains 322 stocks from all areas of the technology sector.
Close to one-third of this ETF is allocated to semiconductor stocks, which play a significant role in the development of artificial intelligence (AI). If AI continues to surge in the coming years, this ETF can help investors gain exposure to this sector with less risk than buying individual stocks.
With tech stocks soaring in recent years, this ETF has seen substantial gains. It's earned an average rate of return of 22.18% per year over the past 10 years, outpacing both the S&P 500 Growth ETF and the Mega Cap Growth ETF in that time.
Higher earning potential often comes with greater risk, however. While this fund is well-diversified within the tech sector, containing over 300 stocks, it's still devoted to only one industry. If you choose to buy, make sure the rest of your investments are spread across other market sectors to reduce your risk.
Again, nobody knows where the market will be in a year or two, and all three of these ETFs are more prone to volatility during market downturns. It's wise, then, to maintain a long-term outlook and be prepared to hold your investment for at least five to 10 years to mitigate the impact of potential volatility.
That said, if these ETFs continue earning returns in line with their 10-year averages, they could be incredibly profitable going forward. If you were to invest $200 per month in the Vanguard S&P 500 ETF versus any of these three growth funds, here's approximately how much you might accumulate over time.
| Number of Years | Total Portfolio Value: VOO-14.58% Avg. Annual Return | Total Portfolio Value: VOOG-16.69% Avg. Annual Return | Total Portfolio Value: MGK-18.08% Avg. Annual Return | Total Portfolio Value: VGT-22.18% Avg. Annual Return |
|---|---|---|---|---|
| 15 | $110,000 | $131,000 | $147,000 | $208,000 |
| 20 | $234,000 | $301,000 | $355,000 | $584,000 |
| 25 | $478,000 | $667,000 | $833,000 | $1,608,000 |
Data source: Author's calculations via investor.gov.
When investing in higher-risk ETFs, there's always a chance they may underperform -- especially in the short term. However, if the tech sector continues to thrive and growth stocks experience significant growth, these ETFs could prove to be lucrative over time.
The right investment can help build wealth that lasts a lifetime, and growth ETFs have a stronger chance of earning above-average returns. If you're willing to take on more risk in exchange for potentially higher earnings, these three Vanguard funds could help you beat the market in 2026 and beyond.
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Katie Brockman has positions in Vanguard Admiral Funds-Vanguard S&P 500 Growth ETF, Vanguard Information Technology ETF, and Vanguard S&P 500 ETF. The Motley Fool has positions in and recommends Vanguard S&P 500 ETF. The Motley Fool has a disclosure policy.
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