10 Best ETFs To Buy and Hold for Long-Term Growth
Written by
John Csiszar
Edited by
Melanie Grafil
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If you’re a long-term investor looking to diversify your growth portfolio, there are a number of exchange-traded funds that can help you reach your goals. ETFs are like mutual funds in that they hold multiple securities, but they trade on an exchange like a stock. This makes them very easy to buy and sell, and they generally have low internal expenses as well.
10 Best ETFs for Long-Term Growth
With a single purchase, you can track any number of different sectors or market indices, from international small-cap or dividend stocks to the entire U.S. stock market. While there are literally thousands of ETF options and many excellent ETFs, here are 10 that do a great job of covering various areas of the stock market:
- Invesco S&P SmallCap Momentum ETF (XSMO)
- iShares Core S&P U.S. Growth ETF (IUSG)
- Invesco S&P 500 GARP ETF (SPGP)
- Invesco KBW Property & Casualty Insurance ETF (KBWP)
- iShares U.S. Healthcare ETF (IYH)
- The Technology Select Sector SPDR Fund (XLK)
- iShares MSCI EAFE ETF (EFG)
- ProShares Ultra Utilities (UPW)
- Vanguard High Dividend Yield ETF (VYM)
- Invesco QQQ Trust (QQQ)
1. Invesco S&P SmallCap Momentum ETF (XSMO)
- Price as of Oct. 9: $66.00
- One-year return: 37.16%
- 10-year return: 11.70%
- Top five holdings: Carpenter Technology Corp., Jackson Financial Inc., Mueller Industries, SPX Technologies Inc., Moog Inc.
The Invesco S&P SmallCap Momentum ETF has returned annualized gains of 11.70% (net asset value) over 10 years. The fund has tracked a number of different indexes since its inception in 2005, and it’s currently based on the S&P SmallCap 600 Index. The fund has 117 holdings in its portfolio, weighted toward industrials and financial sectors, which comprise about 56% of its holdings. The expense ratio is a modest 0.42%.
2. iShares Core S&P US Growth ETF (IUSG)
- Price as of Oct. 9: $133.16
- One-year return: 40.13%
- 10-year return: 14.82%
- Top five holdings: Apple, Nvidia, Microsoft, Amazon, Meta Platforms
The iShares Core S&P U.S. Growth ETF is a popular market-tracking ETF with $20.13 billion in assets under management. The ETF tracks U.S. mid- and large-cap growth stocks, selecting equities based on sales growth, price-to-earnings ratio changes and momentum. This fund has a low 0.04% expense ratio, and its 10-year average annual return is 14.82%.
3. Invesco S&P 500 GARP ETF (SPGP)
- Price as of Oct. 9: $105.97
- One-year return: 16.42%
- 10-year return: 13.92%
- Top five holdings: Nvidia, EOG Resources, Arista Networks Inc., United Airlines Holdings Inc., Valero Energy
The Invesco S&P 500 GARP ETF tracks S&P 500 stocks and makes selections according to growth, quality and value, weighted by growth. This is a smaller fund with just 77 holdings and $4.26 billion in assets under management. However, it was established in 2011, which means it has a solid track record, and it has returned an average of 13.92% per year over the last 10 years.
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4. Invesco KBW Property & Casualty Insurance ETF (KBWP)
- Price as of Oct. 9: $114.92
- One-year return: 39.39%
- 10-year return: 13.91%
- Top five holdings: Travelers, American International Group, Chubb, Progressive, American International Group Inc.
The Invesco KBW Property & Casualty Insurance ETF tracks the KBW Nasdaq Property & Casualty Index, which consists primarily of property and casualty insurance companies, weighted by market cap. The fund has gained 29.05% year to date and 39.39% in the past year. KBWP is a small fund, with $470 million in assets under management, and its 10-year average annual return is an impressive 13.91%.
5. iShares US Healthcare ETF (IYH)
- Price as of Oct. 9: $64.58
- One-year return: 21.68%
- 10-year return: 10.73%
- Top five holdings: Eli Lilly, UnitedHealth Group, Johnson & Johnson, AbbVie, Merck
The $3.45 billion iShares U.S. Healthcare ETF tracks the Russell 1000 Health Care RIC 22.5/45 Capped Gross Index and has 107 holdings that include the largest pharmaceutical, healthcare and biotechnology companies in the U.S. The fund has a low 0.39% expense ratio. Over the last 10 years, it has produced average annual returns of 10.73%.
6. The Technology Select Sector SPDR Fund (XLK)
- Price as of Oct. 9: $230.50
- One-year return: 38.79%
- 10-year return: 20.46%
- Top five holdings: Apple, Nvidia, Microsoft, Broadcom, Oracle
If you’re looking for a little more punch in your growth stock portfolio, take a look at the Technology Select Sector SPDR Fund. This ETF is dedicated to specific sectors of the market rather than tracking a broad market index. As a more narrowly focused ETF, this fund can be more volatile than the broader index funds, but it may also offer the potential for greater returns.
Over the past decade, the performance of the Technology Select Sector SPDR Fund has been nothing short of spectacular, posting an annualized return of 20.46% over 10 years. However, investors should note that the fund is top-heavy, with just three stocks, Apple, Nvidia and Microsoft, now comprising over 40% of the ETF’s portfolio.
7. iShares MSCI EAFE ETF (EFG)
- Price as of Oct. 9: $105.90
- One-year return: 26.87%
- 10-year return: 6.36%
- Top five holdings: Novo Nordisk, ASML Holding, AstraZeneca, SAP, LVMH
For a little more diversification to your growth portfolio, consider an international ETF. The iShares MSCI EAFE ETF owns large- and mid-cap stocks from developed nations spanning Europe, Australia, Asia and the Far East, with Japanese equities making up over 20% of holdings. Since it can be hard for American investors to get enough information to make qualified judgments on individual foreign stocks, owning an ETF can be a great way to get some international exposure without having to make blind guesses about specific companies.
The MSCI EAFE ETF has returned an average of 6.36% per year for the last 10 years. It owns 394 stocks, including many names that are familiar to Americans, from Nestle and AstraZeneca to LVMH, which is the world’s largest luxury goods conglomerate and the parent company of Louis Vuitton, Givenchy, Dior and Tiffany.
8. ProShares Ultra Utilities (UPW)
- Price as of Oct. 9: $78.62
- One-year return: 80.80%
- 10-year return: 13.09%
- Top five holdings: Utilities Select Sector Index Swap Bank of America, Utilities Select Sector Index Swap Goldman Sachs International, Utilities Select Sector Index Swap Societe Generale, Utilities Select Sector Index Swap UBS AG, NextEra Energy
The ProShares Ultra Utilities ETF is a 2x leveraged fund that tracks the market-cap-weighted S&P Utilities Select Sector Index of S&P 500 U.S. utility companies. It’s considered a short-term investment, holding swap agreements and resetting daily. That said, UPW has returned an average of 13.09% per year for the last 10 years.
9. Vanguard High Dividend Yield ETF (VYM)
- Price as of Oct. 9: $129.14
- One-year return: 27.96%
- 10-year return: 10.21%
- Top five holdings: Broadcom, JPMorgan Chase, Exxon Mobil, Procter & Gamble, Johnson & Johnson
The Vanguard High Dividend Yield ETF tracks the FTSE High Dividend Yield Index, which looks at the performance of stocks from companies that pay high dividend yields. Among its holdings are Dividend Aristocrats like Johnson & Johnson, Procter & Gamble and ExxonMobil. Over the last 10 years, the ETF has produced annualized returns of 10.21%.
10. Invesco QQQ Trust (QQQ)
- Price as of Oct. 9: $439.15
- One-year return: 34.22%
- 10-year return: 18.28%
- Top five holdings: Apple, Nvidia, Microsoft, Broadcom, Meta Platforms
The Invesco QQQ Trust ETF is among the best known. Tracking the Nasdaq-100 Index, the ETF’s 101 holdings include a diverse selection of nonfinancial stocks listed on the Nasdaq. Holdings are weighted toward tech but also include nontech growth and large-cap holdings. The fund is up over 34% in the past year and has a 10-year annualized return of 18.28% as of Oct. 9.
FAQ
Tempting as it is to go with whatever ETF has the highest recent gains, long-term performance is a better way to evaluate a fund's suitability for your portfolio.- Which ETF has the best 10-year return?
- ProShares Ultra Semiconductors. This semiconductor ETF has returned an annualized average of 26.88% per year in the last 10 years.
- What is the best-performing ETF in the last five years?
- ProShares Ultra Semiconductors is also the best performer over five years — 33.92%.
Cynthia Measom and Daria Uhlig contributed to the reporting for this article.
Data is accurate as of Oct. 9, 2024, and is subject to change.
Editorial Note: This content is not provided by any entity covered in this article. Any opinions, analyses, reviews, ratings or recommendations expressed in this article are those of the author alone and have not been reviewed, approved or otherwise endorsed by any entity named in this article.
