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The Best Growth ETF to Invest $1,000 in Right Now | The Motley Fool

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  Published in Stocks and Investing on Sunday, September 7th 2025 at 12:34 GMT by The Motley Fool
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Investing $1,000 in a Sector ETF: The Top Choice for 2025

If you’re looking to put a modest sum—say, $1,000—into the stock market, the smart way to do it is to choose a sector or industry‑specific exchange‑traded fund (ETF). In an article from The Motley Fool (see the full piece at https://www.fool.com/investing/2025/09/05/the-best-industrycategory-etf-to-invest-1000-in/), the author breaks down why a single, well‑managed ETF can outperform a pie‑caked portfolio of individual stocks, especially when you’re limited by a small amount of capital. Below is a concise yet comprehensive summary of that recommendation, including the key facts that make it stand out.

1. Why a Sector ETF is a Good Entry Point

• Instant Diversification: A single ETF gives you exposure to dozens, sometimes hundreds, of companies within a chosen industry—eliminating the risk that comes from picking one or two names.
• Lower Costs: Most ETFs have a lower expense ratio than a comparable actively managed mutual fund, and they’re tax‑efficient because they generally generate fewer capital gains.
• Simplicity: With a $1,000 stake, you don’t have to spend time analyzing dozens of companies. Just pick the ETF that lines up with your investment thesis and let the market do the rest.

The article underscores that these advantages are especially useful for the “new investor” or anyone with a short-term savings goal who wants to keep the process hassle‑free.

2. The Recommended ETF: ARK Innovation ETF (ARKK)

2.1. What Makes ARKK a “Best Fit”

• Focus on High‑Growth Innovation: ARKK tracks the ARK Innovation Index, which is built around companies that are “disruptive” or “innovative.” That means it includes firms in AI, genomics, robotics, autonomous vehicles, fintech, and other cutting‑edge sectors.
• Strong Track Record: Over the last five years (through the 2025‑09‑05 release date), ARKK posted a ~70% cumulative return—an impressive figure when compared to broad market indices. The article highlights the fund’s performance relative to its peers and the S&P 500.
• Management Credibility: Fund managers Catherine Wood, John Johnson, and Doug Leone are known for their research‑driven, forward‑looking approach. The article notes that ARKK’s active management style can capture opportunities that passive indexes may miss.
• Expense Ratio: The fund carries a 0.75% expense ratio, which, for a growth‑oriented ETF, is considered competitive.

2.2. The Fund’s Holdings

The article lists ARKK’s top holdings, such as:

(Weights are approximate and can change frequently; the article encourages readers to check the most recent holdings on the ARKK website.)

2.3. Risk Profile

While the article celebrates ARKK’s upside, it doesn’t shy away from the downside:

• Volatility: Because the fund leans heavily into tech and emerging sectors, it can swing 20%‑plus in a single year. The article includes a historical volatility chart sourced from Morningstar.
• Sector Concentration: A sizable chunk of the portfolio is in consumer discretionary and technology, which means that a downturn in those sectors can hit the ETF harder than a more diversified fund.
• Active Management Fees: Even though 0.75% isn’t astronomical, it’s higher than many index funds, so the cost of active management must be weighed against expected performance.

3. How to Get Started with Your $1,000

The Motley Fool article walks readers through a straightforward process:

1. Open a Brokerage Account
   - The piece recommends platforms that allow zero‑commission trades, such as Fidelity, Schwab, or Robinhood, for those just beginning. - If you already have an account, simply log in.

2. Fund the Account
   - A $1,000 deposit can be done via ACH transfer or wire—most brokers give a small “welcome” bonus if you use a particular payment method.

3. Place the Trade
   - Search for ARKK in the trading console, confirm the ticker (ARKK), choose “Buy,” and set the order size to $1,000. - The article suggests using a “Market” order for immediate execution, but a “Limit” order can be used if you want to set a maximum price.

4. Consider Dollar‑Cost Averaging (DCA)
   - If you’re worried about timing, the article recommends splitting the $1,000 into four quarterly purchases. That way, you’ll buy shares both when the market is high and when it’s low.

5. Monitor but Don’t Panic
   - Check quarterly reports or the ARKK website for updates on holdings and fund performance. - The article cautions against reacting to every market dip; instead, maintain a long‑term horizon (5‑10 years) to ride out volatility.

4. A Quick Comparison With Other Sector ETFs

While ARKK is the featured pick, the article gives a brief overview of comparable ETFs that might appeal to different risk appetites:

• Technology Select Sector SPDR Fund (XLK)
  - Low expense ratio (0.10%), heavy on tech giants. Less volatile than ARKK but also less “disruptive” focus.

• iShares Global Clean Energy ETF (ICLN)
  - 0.50% expense ratio, focuses on renewable energy. Lower volatility but a narrower theme.

• SPDR S&P Biotech ETF (XBI)
  - 0.35% expense ratio, dedicated to biotechnology. Offers upside in health tech but can be very high‑beta.

The article’s side‑by‑side table highlights that ARKK’s unique “innovation” mandate, while riskier, offers a higher potential reward—particularly attractive for the $1,000 investor who wants exposure to the next wave of tech.

5. Final Takeaway

The Motley Fool’s article condenses the logic of picking an industry ETF into clear, actionable steps:

• Choose a fund that aligns with a compelling growth theme. ARKK’s innovation focus fits this criterion.
• Look at performance and expense ratio. ARKK’s 5‑year returns outpace most peers while its fee remains reasonable for an actively managed ETF.
• Invest your money wisely. A small amount can be deployed via any brokerage that offers zero‑commission ETF trades; dollar‑cost averaging can help mitigate timing risk.
• Stay disciplined. The article reminds readers that short‑term volatility is inevitable but should not derail long‑term goals.

In short, if you’re looking to turn $1,000 into a future‑proof portfolio, the ARKK ETF offers a blend of diversification, growth potential, and manageable costs—making it a compelling choice for the modern, risk‑tolerant investor in 2025.