Build An Aggressive Growth ETF Portfolio With These 5 ETFs
If you're looking for a way to take an aggressive approach to wealth building, you may want to consider adding an aggressive growth ETF to your portfolio.
These types of ETFs are designed to help you make the most of rapid growth opportunities in the stock market and can be a great way to expedite reaching your financial goals sooner.
So if you're looking to turbocharge your stock portfolio, keep reading!
What is an Aggressive Growth ETF Portfolio?
An Aggressive Growth ETF Portfolio is a portfolio that consists of Exchange Traded Funds (ETFs) with a higher degree of risk. The Aggressive Growth ETF Portfolio is designed for investors who are willing to take on more risk in order to achieve higher returns.
The Aggressive Growth ETF Portfolio generally consists of ETFs that track the technology sector. As technology companies tend to generate promising growth returns by using technology to disrupt different industries and scale faster than a traditional company.
The Aggressive Growth ETF Portfolio is a popular choice for investors who have a long-term investment horizon and are looking to maximize their returns.
However, it is important to note that the Aggressive Growth ETF Portfolio comes with a higher degree of risk, which means that investors could lose money if the market does not perform well.
Is an aggressive growth portfolio good?
When it comes to investing, there is no one-size-fits-all approach. Each investor has different goals, risk tolerance, and time horizon. As a result, the best investment strategy for one person may not be the best for another.
If you’re younger and have a good 20+ years until you need to sell your investments, an aggressive growth portfolio could be a good strategy for you. This type of portfolio is designed for investors who are willing to take on more risk in pursuit of higher returns.
While an aggressive growth portfolio can lead to outsized gains, it can also subject investors to significant losses if the market turns against them. As such, these portfolios are not suitable for everyone. Before investing in an aggressive growth portfolio, make sure you understand the risks and have a clear plan.
Should I invest conservatively or aggressively?
If you're young and have a long time horizon, you may be able to afford to take more risks. An aggressive investment strategy can lead to higher returns, but it also comes with the potential for greater losses.
If you're closer to retirement or if you need income from your investments soon in order to cover expenses, a more conservative approach may be appropriate for you.
Alternatively, you could invest in a mixture of both aggressive and conservative funds/stocks.
Aggressive Growth ETFs
$QQQ - Invesco Trust Series 1
Goal: To track the performance of the NASDAQ 100.
Number of companies held: 100
Annual expense fee: 0.20%
10-year performance: 15.97%
Pros: QQQ is a great fund to add if you want exposure to some of the biggest tech companies on the public market. The fund has historically outperformed the S&P 500 but is much more volatile. QQQ is heavily concentrated in its top 10 holdings. With over 52% of the fund held within 10 stocks.
Cons: The fund does not hold any small companies. All of the companies held within the Nasdaq 100 are large-cap stocks. So if you want exposure to smaller growth stocks, a fund like QQQJ would likely be better for you. Additionally, the fund is heavily concentrated in the top 10 stocks within the fund. Making this fund extra volatile.
$QQQ - Top 10 stock holdings
Source: ETF.com
$VUG - Vanguard Growth ETF
Goal: To track the performance of the CRSP US Large Cap Growth Index.
Number of companies held: 260
Annual expense fee: 0.04%
10-year performance: 12.93%
Pros: VUG offers great exposure to some of the fastest-growing public companies in the U.S. Additionally, the fund offers an ultra-low annual expense fee of just 0.04% per year. Although the fund is heavily concentrated in tech-related companies, it has additional exposure to growth-related stocks in other sectors as well.
Cons: Just like QQQ, this fund does not have any exposure to smaller companies. It is also less aggressive when compared to the other funds mentioned in this blog post.
$VUG - Top 10 stock holdings
Source: ETF.com
$IWY- iShares Russell Top 200 Growth ETF
Goal: Seeks to give you exposure to large companies that exhibit growth characteristics.
Number of companies held: 111
Annual expense fee: 0.20%
10-year performance: 14.51%
Pros: This fund is similar to QQQ but has a few more growth companies included. This could be a good fund to add if you want high concentration in the top 10 stocks listed below, but with some additional diversification.
Cons: The top 10 stocks within this fund make up around 57% of the total fund. Making the fund’s performance highly dependent on those 10 stocks.
$IWY - Top 10 stock holdings
Source: ETF.com
$QQQJ - Nasdaq Next Gen 100 ETF
Goal: QQQJ invests around 90% in companies that fall in the 101st to the 200th largest companies on the NASDAQ composite index.
Number of companies held: 99
Annual expense fee: 0.15%
Pros: The NASDAQ 100 makes up the 100 top-performing stocks in the NASDAQ composite index. This specific fund seeks to give you exposure to the “next generation” of NASDAQ 100 stocks. These companies are smaller and riskier but have more growth potential.
Cons: This fund is more volatile than the NASDAQ 100. The companies within this fund are at a higher risk of going bankrupt compared to the NASDAQ 100.
$QQQJ - Top 10 stock holdings
Source: ETF.com
$ARKK - Ark Innovation ETF
Goal: Seeks to invest in companies that It classifies as “disruptive innovation.”
Number of companies held: 33 to 55
Annual expense fee: 0.75%
5-year performance: 3.71%
Pros: $ARKK was a top-performing fund during the 2020/2021 bull market craze. The fund concentrates on a few tech stocks that it determines are disruptive innovations. During boom times, this fund could outperform the overall market if the companies it selects disrupt the sectors they are operating in. This could be a great fund to add if you want concentrated exposure to potential disruptive growth stocks.
Cons: This fund is actively managed by Cathie Wood. It also has a high annual expense fee. There is very little diversification within this fund, so your performance will be dependent on a few companies. Also, the companies this fund holds are extremely high risk. Almost all of them aren’t actually profitable yet.
$ARKK - Top 10 stock holdings
Source: ETF.com
Final Thoughts: Investing In Aggressive Growth ETFs
Some investors prefer to take risks in hopes of achieving high returns, while others prefer to play it safe, focusing on stability.
The Aggressive ETF Portfolio is designed for investors who are willing to take on more risk in order to achieve higher potential returns. However, as nice as higher returns sound, one key point to remember is that investors could lose money if the market does not perform well.
If you are comfortable with this level of risk and believe that the potential rewards outweigh the risks, then this may be the investment strategy for you.
For many investors, the best strategy is to take a balanced approach, investing in a mix of aggressive growth ETFs and conservative ETFs.
This allows them to participate in the potential upside of the stock market while also protecting their downside. While there is no guaranteed path to success, this diversified approach can help investors achieve their financial goals. Especially if they’re younger.
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As Always: Buy things that pay you to own them.
-Josh
Blog Post: #055
