Bryan Armour: Growth ETFs invest in stocks with high expectations of future growth. Their prices reflect that expectation, creating a higher hurdle to clear compared to more cheaply valued peers. Because of this, growth stocks tend to be more volatile. The past two years have made their upside clear, though. Since the start of 2023 through January 2025, large-growth stocks have outperformed the rest of the market. Case in point, the Morningstar US Large Growth Index trounced the Morningstar US Large Value Index by 23 percentage points during that time, highlighting the better half of volatility. But the other side of volatility had reared its ugly head in 2022, when the growth index gave up over 40 percentage points to value.
For better or worse, big years tend to characterize growth investing. Our favorite growth ETFs find ways to churn out more winners than losers. Let’s get started with three great growth ETFs for 2025.
3 Great Growth ETFs for 2025
- Vanguard International Dividend Appreciation ETF VIGI
- T. Rowe Price Blue Chip Growth ETF TCHP
- Neuberger Berman Small-Mid Cap NBSM
First on my list is Gold-rated Vanguard International Dividend Appreciation ETF, ticker VIGI. This ETF pulls in large- and mid-cap stocks from foreign developed and emerging markets that have increased their dividend payments for at least seven consecutive years. It then eliminates the highest-yielding names from that cohort to ensure its holdings are financially stable and more likely to continue making dividend payments. The result is a portfolio of high-quality, stable businesses.
Cost controls create a durable advantage for VIGI. Its fee of 10 basis points is among the lowest in the foreign large-growth Morningstar Category. And it weights holdings by market cap, reducing turnover and accompanying trading costs.
High quality and low costs have been a winning combination, which is why I own this ETF. VIGI is among the least-volatile funds in its category, yet it has outperformed its average category peer. I expect it to continue outperforming peers on a risk-adjusted basis going forward.
Second on my list is Silver-rated T. Rowe Price Blue Chip Growth ETF, ticker TCHP. This nontransparent ETF holds strong, growing, and defensible businesses with staying power. A talented manager and deep analyst pool helps identify these high-flying companies.
The portfolio currently sits at 75 firms, with most of its assets invested in the “Magnificent Seven” stocks, like Nvidia NVDA, Microsoft MSFT, and Apple AAPL. Still, the strategy hunts for growth stories in both public and private markets and even carves out a small allocation to foreign developed-markets companies.
Quality fundamental research defines the success of this ETF. However, this ETF isn’t for the faint of heart: It has been more volatile than its average peer since its launch in 2020. But that volatility has paid off over the history of its sister mutual fund of the same name. Over the past 15 years, the mutual fund returned over 16% per year annualized, falling in the top quartile of large-growth category peers. We expect long-term outperformance to persist but expect some bumps in the road along the way.
Last on my list is Silver-rated Neuberger Berman Small-Mid Cap, ticker NBSM. This ETF doesn’t explicitly target growth stocks but instead hunts for profitable, high-quality companies with modest valuations. Though the ETF only launched last year, the managers have been involved in managing this strategy in a separate account for over 30 years.
Deep resources and a long-tenured team steer this ship. The managers are patient and methodical in their approach. They tend to start positions small and build them up as fundamentals confirm the companies’ strength. They will also trim winners slowly to make room for new picks, nudging the portfolio back toward smaller companies. The result tends to be a 45- to 60-stock portfolio of moderate growth companies that straddles the line between small- and mid-cap on the Morningstar Style Box.
Growth at a reasonable price is tough to do well, but this team has answered the call. Despite a lean portfolio, this ETF should significantly tamp down on risk compared to peers without giving up performance to do so. Its mutual fund sibling, Neuberger Berman Genesis, has posted bottom-quintile volatility in its category despite edging out the category average in total return over the past 10 years. We expect this ETF to follow a similar trajectory.
That’s it for me today. Please feel free to share your thoughts about this list with me on X @mstararmour and follow Morningstar’s ETF coverage at Morningstar.com/topics/etfs. Happy investing.
Watch These 4 Dividend ETFs Strike the Right Balance for Income Investors for more from Bryan Armour.
The author or authors do own shares in any securities mentioned in this article. Find out about Morningstar's editorial policies.
