All The Growth You Will Ever Need

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We have big news this week. Thanks to you, we have officially crossed 2,000 subscribers!

When I started sharing my investing journey I never thought I'd be writing to over 2k people, but here we are. I know my writing is far from perfect, but I blame that on being raised in Texas.

Seriously though, I appreciate your support. Hopefully you have learned a thing or two and had some chuckles along the way.

Here is a quick summary of the last few days in the market. Netflix earnings dropped yesterday, with the highlight being a loss of almost 1 million subscribers last quarter. As you would have guessed, the stock is up 5%+ after hours. Apple also released news that they plan to slow hiring in the next year due to economic concerns. Despite this, markets are still overall green for the week (knock on wood).

Quote

“Planning is important, but the most important part of every plan is to plan on the plan not going according to plan.” - Morgan Housel

All The Growth You Will Ever Need

As you likely know growth stocks have been hammered. So, I figured it was a good time to throw some ideas out there incase you are looking to "be greedy when others are fearful."

Sorry I had to say it.

This is going to be a blast of information, but I kept it short so stick with me.

VUG - Vanguard Growth ETF

Created in 2004 VUG is one of the most popular ETFs when it comes to assets under management. (I own this one in my Roth IRA).

• Expense ratio: 0.04%

• Inception date: 2004

• 5 year avg return: 12.9%

Top 5 holdings: Apple, Microsoft, Google, Amazon, Tesla

VGT - Vanguard Information Technology ETF 

Unlike the previous, VGT only holds tech stocks with the majority being in hardware, storage, software, and semiconductors.

• Expense ratio: 0.1%

• Inception date: 2004

• 5 year avg return: 18.2%

Top 5 holdings: Apple, Microsoft, NVIDIA, Visa, Mastercard

QQQ - Invesco Nasdaq 100

QQQ tracks the 100 largest non-financial companies listed on the Nasdaq.

An important note, QQQM is identical and has a lower expense ratio. The reason I buy QQQ is that it experiences much more volume, and therefore has a liquid option chain. In the future I might want to sell options on my shares. This is why I buy QQQ instead of QQQM.

• Expense ratio: 0.2%

• Inception date: 1999

• 5 year avg return: 16.3%

Top 5 holdings: Apple, Microsoft, Amazon, Tesla, Google

QQQJ - Invesco NASDAQ Next Gen 100 ETF

The new kid on the block, QQQJ offers exposure to the 101st to 200th largest companies on the Nasdaq. This is a position I have been adding to in my Roth IRA (should be considered a speculative investment).

• Expense ratio: 0.15%

• Inception date: 2020

• Avg return since inception: -6.9%

Top 5 holdings: Enphase Energy, ON Semiconductor, CoStar, Tractor Supply, Coca-Cola Europacific Partners

VBK - Vanguard Small-Cap Growth ETF

If you are looking to diversify, VBK offers exposure to smaller companies with growth potential.

• Expense ratio: 0.07%

• Inception date: 2004

• 5 year avg return: 6.8%

Top 5 holdings: Bit-Techne, Entegris, Liberty Media, Equity LifeStyle Properties, PTC Inc.

There wasn't enough room on Twitter for me to mention this but small cap growth historically isn't the best. VBK is a perfect example of how it is important to analyze and compare even when you are buying ETFs.

Just because something says "growth" doesn't mean it is going to return the most. Though VBK has done okay, if you want small cap exposure with likely better returns, look into VBR (Vanguard Small-Cap Value ETF) or VB (Vanguard Small-Cap ETF). Both of these have performed better than VBK in recent years.

IWF - Russell 1000 Growth

The Russell 1000 is slice cut from the Russell 3000 index. A cool fact that I didn't know is that it compromises about 92% of the total market cap of all listed stocks in the US (Investopedia).

• Expense ratio: 0.19%

• Inception date: 2000

• 5 year avg return: 14%

Top 5 holdings: Apple, Microsoft, Amazon, Tesla, Google

XLV - Health Care Select Sector

This is one that isn't talked about enough. Historically, the health care sector has performed well and is an area that will continue to see innovation. In XLV you can expect your money to go into companies involved with health care (duh), biotech, life sciences, and medical devices.

• Expense ratio: 0.1%

• Inception date: 1998

• 5 year avg return: 12%

Top 5 holdings: UnitedHealth Group, Johnson & Johnson, Pfizer, AbbVie, Eli Lilly and Company

MGK - Vanguard Mega Cap Growth

No, the is not Machine Gun Kelly's ETF.

MGK only holds 99 stocks that fall into the "large cap growth" style. This means that they have a market cap above $10 billion. The top 5 holdings account for 45% of the fund.

• Expense ratio: 0.07%

• Inception date: 2007

• 5 year avg return: 13.6%

Top 5 holdings: Apple, Microsoft, Amazon, Google, Tesla

IJH - iShares Core S&P Mid Cap

IJH is unique since it invest in mid-cap stocks (market value of $2 billion - $10 billion). I wasn't aware of it until it was brought to my attention on Twitter.

• Expense ratio: 0.17%

• Inception date: 2000

• 5 year avg return: 6.3%

Top 5 holdings: Targa, Carlisle Companies, Steel Dynamics, Builders FirstSource, Service

ARKK - Ark Innovation ETF

I'll probably catch some flak for mentioning this one. ARKK has the biggest boom-to-bust performance on this list. Fueled by the 2020-2021 hype that I talked about last email, it returned around 300% in 2020.

Now Cathie Wood's flagship ETF is 71% below highs. Yes, this is a risky play with a high expense ratio, but if growth stocks come back ARKK will likely make a run.

• Expense ratio: 0.75%

• Inception date: 2014

• 5 year avg return: 8.3%

Top 5 holdings: Zoom, Tesla, Roku, CRISPR Therapeutics, Teladoc

Conclusion

I understand this an overload of information on ETFs.

My goal of this email though is simply to show what is out there, and potentially spark you to analyze one of these for yourself.

If there is another growth ETF that you like, reply to this email and give me a quick explanation of it. I am always open to new ideas!

Have a great rest of the week, Cade.

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Resources:

Simply Invest With ETFs - Learn the in’s and out’s of ETFs and why they are the simplest and most effective way to invest.

Turbocharge Your Dividends - Generate extra income by selling covered calls on your stocks and ETFs.

Tweet Hunter - Automate your Twitter and build an account that will pay you $100 a week.

Personal Capital - Track all of your investments in one place.