In an era of market crashes and booms, strong buy ETFs are now a go-to option for many investors. Exchange-traded funds offer a compelling case to combat market risks by investing in a broad range of stocks instead of an individual asset. This, in turn, provides diversification, liquidity and cost-efficiency for risk-averse investors.
In recent years, we’ve witnessed substantial growth in the ETF market. In 2023, the ETF industry managed $11 trillion in assets globally with a five-year compound annual growth rate (CAGR) of 19.3%. Experts predict this value will reach $20 trillion by 2028. The demand is driven by a growing appetite for passive investment strategies and advancements in blockchain technology that allow for greater customization.
Given the popularity of ETFs, it should come as no surprise that investors have thousands of options to choose from. Narrowing down the right investment depends on factors such as the industry, price and return. And while everyone has their own unique preferences, I’ve narrowed down three broad-range, well-managed strong buy ETFs to add value to your portfolio.
Vanguard Growth ETF (VUG)
Investing in large-cap growth stocks in the U.S. equity market is an expensive and risky undertaking. The Vanguard Growth ETF (NYSEARCA:VUG) helps combat these downsides by providing a cheaper alternative for investors looking to add large-cap exposure to their portfolios.
Sponsored by the investment firm Vanguard, this ETF passively manages $125 billion in assets with year-to-date returns of 20.3%. The ETF trades at $373.39, making it a low-cost option to invest in large companies.
Large-cap typically refers to companies with a market capitalization of over $10 billion. These stocks have higher growth rates and tend to perform well in a bull market. They are also less riskier than small-cap stocks, making them a safe bet.
The Vanguard Growth ETF provides exposure to the top large-cap stocks, with a majority of the portfolio comprising technology and consumer stocks. Moreover, the fund is one of the more economical ETFs on the market, with an annual operating expense ratio of 0.04%.
Given the strong exposure this fund provides, the Vanguard Growth ETF is highly rated, with 171 analysts giving this ETF a Strong Buy consensus.
VanEck Semiconductor ETF (SMH)
The dominance of semiconductor stocks has left investors with too many options to choose from. Thankfully, strong buy ETFs provide a viable alternative. The VanEck Semiconductor ETF (NASDAQ:SMH) is ideal for investors looking to gain more exposure to semiconductor companies. This fund manages 26 semiconductor companies, with Nvidia (NASDAQ:NVDA) holding the largest position at 20.13%. Other names include Qualcomm (NASDAQ:QCOM) and Intel (NASDAQ:INTC).
The VanEck Semiconductor ETF is an investor favorite for several reasons. Total net assets in the fund amount to $24.8 billion, with year-to-date (YTD) returns of a whopping 51.41%. This growth can be attributed to the positive investor sentiment and explosive growth in several semiconductor companies this year. The semiconductor ETF also operates at a low expense ratio of 0.35%.
Hence, it should come as no surprise that analysts are bullish on the VanEck Semiconductor ETF. The fund has a Strong Buy consensus based on 21 analyst ratings and a high price target of $773.70. That’s some major upside potential, given the ETF is currently trading at $264.89.
iShares Russell 1000 Growth ETF (IWF)
The iShares Russell 1000 Growth ETF (NYSEARCA:IWF) is a good option for investors seeking a broader exposure to large and mid-cap growth stocks. This ETF is a part of the Russell 1000 Index, which includes the top 1,000 publicly traded companies on the stock exchange. The growth ETF, however, focuses only on the companies that show promising signs of long-term returns. It currently invests in 439 companies across a number of industries.
When it comes to investing in assets with safe returns, large-cap stocks tend to provide the most utility. Thus, iShares Russell Growth ETF’s emphasis on prominent large-cap stocks adds an extra layer of insulation from market volatility. Unsurprisingly, this ETF remains one of the most popular options amongst investors, with $96 billion in assets under management at a low expense ratio of 0.19%.
Analyst ratings mirror the positive sentiments towards the iShares Russell 1000 Growth ETF. The fund is currently among the top Strong Buy ETFs based on 351 analyst ratings.
On the date of publication, Divya Premkumar did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
