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3 Growth ETFs to Invest $1,000 in Right Now | The Motley Fool

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  Published in Stocks and Investing on Sunday, September 21st 2025 at 9:29 GMT by The Motley Fool
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Three Growth‑Focused ETFs That Might Make a $1,000 Investment Worth Your Time
By a research journalist for the Motley Fool community

When the stock market’s headline‑grabbing volatility starts to settle, it’s often a good time to turn the spotlight toward growth. A 2025 snapshot of the U.S. equity universe shows that the best‑performing companies, especially those that are heavily weighted in technology, consumer discretionary, and healthcare innovation, are driving long‑term gains. For investors who want a simple, diversified way to tap that upside without buying individual stocks, a handful of growth‑oriented exchange‑traded funds (ETFs) can do the trick. Below is a summary of the three ETFs that the Fool’s analysts highlighted in their September 21, 2025 article, plus a quick guide on why each one could be a solid fit for a $1,000 dollar investment.

Why Growth ETFs Are Attractive Right Now

1. Resilient Earnings Growth – The U.S. corporate earnings outlook remains robust. Analysts continue to project double‑digit earnings growth for large‑cap firms, especially in high‑margin tech and cloud‑services sub‑sectors. A growth‑focused ETF will hold a concentration of those companies, which tend to reward investors with higher price appreciation over the long run.

2. Lower Expense Ratios – Many growth ETFs have slipped below 0.15% expense ratios in recent years, thanks to competition among providers. That translates into more of your money staying in the market rather than being eaten by fees.

3. Liquidity & Transparency – Growth ETFs usually trade in the hundreds of millions of dollars daily. They’re backed by a handful of top holdings, so you can easily inspect the underlying names and their market caps.

4. Diversification Benefits – Even though the name “growth” may sound niche, the baskets usually contain a mix of large, mid, and sometimes small‑cap companies. The result is a portfolio that can weather a downturn in one sector by offsetting gains in another.

The Fool’s article also notes that while growth investing can offer higher upside, it’s generally more volatile than a broad‑market or value approach. As such, the target reader is an investor with a medium‑to‑long‑term horizon who can tolerate the quarterly swings that accompany tech and innovation stocks.

1. Vanguard Growth ETF (VUG)

Why VUG?
VUG is one of the most popular growth ETFs because of its low cost and its focus on large‑cap growth names that are already leaders in their respective industries. The fund is heavily weighted toward the “FAANG” group (Facebook/Meta, Amazon, Apple, Netflix, Google/Alphabet), and it also has a solid exposure to other high‑growth tech firms like NVIDIA, Tesla, and Adobe. Its 0.04% fee makes it an attractive choice for anyone who wants maximum return potential without a fee drag.

Performance Snapshot
Over the past five years, VUG has returned approximately 20% annually. That outpaces the S&P 500’s ~15% average over the same period, largely due to its tech tilt and its focus on companies that continue to reinvest heavily in R&D.

Potential Risks
Because of its concentration in tech, VUG is more sensitive to changes in the valuation multiples that drive the sector. Any shift in Fed policy that causes a higher discount to future earnings can cause a sizable pullback.

2. iShares Russell 1000 Growth ETF (IWF)

Why IWF?
IWF offers a slightly broader spread of growth names across the Russell 1000 Index, including a good mix of large and mid‑cap companies. The fund’s 0.15% fee is still modest, especially when compared to some actively‑managed growth funds. What makes IWF appealing is its “mid‑cap” exposure, which gives you a taste of companies that are still scaling rapidly but have a lower risk profile than pure high‑growth tech giants.

Performance Snapshot
IWF’s five‑year annualized return sits around 18–19%. The fund tends to perform well during bull markets but can lag behind in bear markets because of its higher beta. For the 2023‑2025 recovery phase, IWF posted a 35% total return, thanks in large part to the rebound of the electric‑vehicle and cloud‑services sectors.

Potential Risks
A key downside is its exposure to companies that are highly volatile and dependent on continued technological innovation. Investors should be prepared for larger swings in the short term.

3. SPDR S&P 500 Growth ETF (SPYG)

Why SPYG?
SPYG tracks the S&P 500 Growth Index, which is a subset of the broader S&P 500 that includes only the growth‑oriented constituents. The fund’s low 0.05% expense ratio is a big draw for cost‑conscious investors. SPYG is often the go‑to ETF for investors who want a “growth” flavor while staying within the confines of the S&P 500’s blue‑chip stability.

Performance Snapshot
The SPYG’s long‑term performance has mirrored that of the S&P 500 Growth Index, delivering roughly 19% annualized growth over the last five years. In the 2024 rally, it outperformed the broader S&P 500 by 7% on a total‑return basis.

Potential Risks
Being anchored to the S&P 500, SPYG is more diversified than pure‑tech funds but still leans heavily on the technology and consumer discretionary sectors. The fund’s beta (~1.1) is slightly higher than the market’s, meaning it will swing more during market volatility.

How to Deploy a $1,000 Investment

1. Decide on an Allocation
   If you’re comfortable with the 2025 market outlook, a straightforward 1:1:1 split (≈$333 each) gives you exposure to each ETF while maintaining diversification.
   If you prefer more tech focus, allocate 40% to VUG, 30% to IWF, and 30% to SPYG.
   If you want a “low‑cost, mid‑cap” stance, put 50% in IWF and split the remaining 50% between VUG and SPYG.

2. Use a Commission‑Free Broker
   Platforms like Fidelity, Schwab, or Robinhood offer commission‑free trades on all three ETFs. Make sure you’re not incurring any hidden fees.

3. Consider Dollar‑Cost Averaging
   If the market’s trajectory feels uncertain, invest $200 in each month for five months. This approach mitigates the impact of any short‑term dip.

4. Re‑balance Periodically
   Every 12–18 months, revisit the fund’s holdings and performance. If the expense ratio changes or the top holdings shift dramatically, you might want to adjust your allocation.

Bottom Line

The Fool’s September 2025 article stresses that growth investing is not a “one‑size‑fits‑all” strategy, but when you look at the data, the three ETFs mentioned—Vanguard Growth ETF (VUG), iShares Russell 1000 Growth ETF (IWF), and SPDR S&P 500 Growth ETF (SPYG)—provide a compelling mix of low cost, solid track records, and diversified exposure to the best‑performing sectors. For a $1,000 dollar investment, these funds can act as a micro‑portfolio that delivers the upside of high‑growth companies while keeping you out of the weeds of picking individual names.

Remember: Growth ETFs can be more volatile than the broader market, so they are best suited for investors who can stay the course over several years. If your risk tolerance is lower or if you need liquidity in the short term, you might want to blend one of these growth funds with a broader or value‑oriented ETF for balance. Happy investing!