Growth ETFs (exchange-traded funds) invest in companies that have a proven history of surpassing average revenue and earnings growth rates. These ETFs seek to capitalize on the long-term potential of these high-growth businesses. Today, we have shortlisted two growth ETFs – VBK and IWP – with over 10% upside potential projected by analysts over the next twelve months.
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Let’s take a closer look at what Wall Street thinks about these two ETFs.
Vanguard Small-Cap Growth ETF (VBK)
The VBK ETF seeks to track the performance of the CRSP U.S. Small Cap Growth Index, which is composed of the growth stocks of small U.S. companies. The ETF aims to hold each stock in nearly the same proportion as its weighting in the index.
VBK has $17.25 billion in assets under management (AUM), with its top 10 holdings contributing 10.25% of the portfolio. Importantly, it has a very low expense ratio of 0.07%. The VBK ETF has returned 1.3% in the past six months.
On TipRanks, the VBK ETF has a Moderate Buy consensus rating. Of the 620 stocks held, 457 have Buys, 146 have a Hold rating, and 17 have a Sell rating. The analysts’ average price target on the VBK ETF of $301.21 implies a 21.14% upside potential from the current levels.
iShares Russell Mid-Cap Growth ETF (IWP)
The IWP ETF seeks to track the performance of the Russell Midcap Growth Index, which is composed of mid-cap U.S. equities. It provides exposure to stocks whose earnings are expected to grow at an above-average rate in comparison to the market.
IWP has $14.28 billion in AUM, with its top 10 holdings contributing 15.79% of the portfolio. Also, it has a low expense ratio of 0.23%, making it a cost-effective option. Interestingly, IWP has generated a return of 5.6% over the past six months.
On TipRanks, the IWP ETF has a Moderate Buy consensus rating. Of the 330 stocks held, 255 have Buys, 66 have a Hold, and nine have a Sell rating. The analysts’ average price target of $124.45 implies a 12.53% upside potential from the current levels.
Concluding Thoughts
ETFs are a low-cost, diversified, and transparent way to participate in the market. These benefits, along with the over 10% upside potential expected by analysts in VBK and IWP ETFs, make them worth considering by investors.
