Investing in exchange-traded funds (ETFs) is a smart and efficient way to build wealth with less time and effort compared to picking individual stocks. ETFs are investment funds that hold a diversified collection of assets, such as stocks, bonds, or commodities, and trade on major stock exchanges just like individual stocks. When you buy a share of an ETF, you are essentially purchasing a fractional ownership in all the underlying assets within the fund. This allows investors to instantly diversify their portfolios, spreading risk across a variety of holdings, and making it much easier to achieve a balanced investment strategy.By purchasing just one share of an ETF, you gain instant ownership in a basket of stocks, offering an easy way to create a diversified portfolio—a strategy that can greatly reduce risk.
In particular, growth ETFs are designed to deliver above-average returns by including stocks with strong potential for future earnings growth. These funds aim to outperform the market over time, making them an attractive option for investors seeking long-term gains. With the current market on the rise, now could be the perfect opportunity to capitalize on increasing stock prices. If you’re aiming to boost your earnings while maintaining the diversification and stability of an ETF, these three growth funds should be on your radar before 2025.
Schwab U.S. Large-Cap Growth ETF
The Schwab U.S. Large-Cap Growth ETF (SCHG 0.31%) is an exchange-traded fund that includes 231 large-cap stocks, which are companies with a market capitalization of at least $10 billion. The fund focuses on companies with strong potential for above-average growth, making it an attractive option for long-term investors. Nearly half of the fund’s allocation is in technology stocks, a sector known for both its high-risk, high-reward nature. While tech stocks can experience volatility, they also tend to deliver higher returns compared to more traditional industries.
In fact, the Schwab U.S. Large-Cap Growth ETF has a consistent record of outperforming the market. Over the last 10 years, it has achieved an average annual return of 16.48%, significantly higher than the historic market average of around 10%.Another key advantage of this ETF is its low expense ratio of 0.04%, meaning investors only pay $4 per year for every $10,000 invested. The low fees associated with ETFs like SCHG make them a cost-effective option, helping investors save on fees while maximizing returns over time.