In this article, we will discuss the 10 best performing growth ETFs in 2022.
Growth stocks have been punished in 2022. The Fed’s aggressive rate hikes throughout the year panicked investors who abandoned ship and caused major sell offs in tech. The higher borrowing costs put a strain on tech companies’ future cash flows, making investors skeptical about growth companies’ ability to grow in such an environment. As of December 8, the tech-heavy Nasdaq Composite has lost roughly about a third of its value year to date, and going into 2023, investors are still being cautious around allocating capital to growth.
While growth stocks are a risky area to put your money in right now, for investors that are looking to gain exposure to growth but avoid the rampant volatility and high risk they come with, growth ETFs can be the answer. Growth ETFs are a type of exchange-traded fund that invests in growth stocks. Investors looking for higher returns and greater diversification than a traditional stock portfolio may choose to invest in growth ETFs.
Investing in growth ETFs can bring many benefits over investing in individual growth stocks. ETFs offer diversification and liquidity, allowing investors to access multiple stocks from a single purchase, without having to purchase each stock separately. ETFs also provide a lower cost of entry compared to buying individual stocks, since the fees associated with ETFs are typically much lower than the fees associated with buying individual stocks. Finally, ETFs offer more stability than individual stocks, as they are less volatile and less prone to sudden price movements. This stability can help investors mitigate risk, particularly during times of market volatility. Furthermore, ETFs are easier to track and manage, as they are typically linked to an index, such as the S&P 500 or the Nasdaq, which makes it easier to gauge performance.
This article will look at some of the best performing growth ETFs in 2022 through which investors can gain exposure to leading growth companies such as Apple Inc. (NASDAQ:AAPL), Alphabet Inc. (NASDAQ:GOOG), and Microsoft Corporation (NASDAQ:MSFT), without being vulnerable to huge price swings.
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Our Methodology
To determine the 10 best performing growth ETFs in 2022, we screened for non-leveraged and non-inverse technology ETFs. We sorted them according to their year-to-date returns, as of December 8, and then ranked them in increasing order of their YTD returns. Along with each ETF, we have mentioned its YTD return, the index it tracks, its portfolio breakdown, and notable holdings.
Best Performing Growth ETFs in 2022
10. Global X Internet of Things ETF (NASDAQ:SNSR)
YTD Return as of December 8: -22.03%
The Global X Internet of Things ETF (NASDAQ:SNSR) is an exchange traded fund that uses a full replication technique to track the performance of the Indxx Global Internet of Things Thematic Index. The fund has an expense ratio of 0.68% and yields 0.59% to investors. As of December 8, the Global X Internet of Things ETF (NASDAQ:SNSR) has lost 22.03% year to date, outperforming the Nasdaq by roughly 8%, and is ranked among the 10 best performing growth ETFs in 2022.
The Global X Internet of Things ETF (NASDAQ:SNSR) invests in companies that belong to the IoT industry. These companies include wearable technology, home automation, connected automotive technology, and sensors companies among others. The Global X Internet of Things ETF (NASDAQ:SNSR) has 63 holdings and a top ten holdings concentration of 47.25%.
Skyworks Solutions, Inc. (NASDAQ:SWKS) is among the most prominent holdings of The Global X Internet of Things ETF (NASDAQ:SNSR). As of September 30, Millennium Management is the top investor in Skyworks Solutions, Inc. (NASDAQ:SWKS) and has a position worth $142.4 million.
On November 30, KGI Securities analyst Derek Chang upgraded Skyworks Solutions, Inc. (NASDAQ:SWKS) to Outperform from Neutral and reiterated his $130 price target on the shares.
Here is what Heartland Advisors had to say about Skyworks Solutions, Inc. (NASDAQ:SWKS) in its third-quarter 2022 investor letter:
“Before the risk-on rebound early in the quarter, we were searching for opportunities to shift from our defensive stance, looking for beaten-down, high-quality “early cycle” leaders. Existing holding, Skyworks Solutions, Inc. (NASDAQ:SWKS), represents one such opportunity that was added to on weakness.
Skyworks is one of two leading providers of radio frequency system components to smartphone makers and electronics manufacturers. With every step-up in product complexity, over the past two decades, the competitive landscape has shrunk while gross margins have increased significantly. 5G represents another such step-up, which is likely to increase how much Skyworks can make per smartphone.
Apple is a big customer, accounting for more than half of Skyworks’ sales. That customer concentration has depressed Skyworks’ valuation over time. More recently, fears surrounding a global recession and risk to consumer demand have further pressured valuation. However, the handset business is expected to benefit from 5G content, which may help offset some macroeconomic pressures. Away from the handset business, Skyworks’ growth is expected to accelerate thanks to other secular drivers such as WIFI 6 and growth of the industrial internet (i.e., “Internet of Things”).
At a P/E of less than eight and a 2.3% dividend yield, SWKS rarely gets this cheap, making this high-quality stock compelling for longterm investors.”
9. VanEck Israel ETF (NYSEARCA:ISRA)
YTD Return as of December 8: -21.02%
The VanEck Vectors Israel ETF (NYSEARCA:ISRA) invests in the public equity markets of Israel. The fund makes use of a full replication technique to track the performance of the BlueStar Israel Global Index. The VanEck Vectors Israel ETF (NYSEARCA:ISRA) has an expense ratio of 0.59% and is offering a yield of 1.66%.
As of December 8, the VanEck Israel ETF (NYSEARCA:ISRA) has lost 21.02% year to date and has outperformed the Nasdaq Composite by roughly 9%. The fund is placed on our list of the best performing growth ETFs in 2022. The VanEck Israel ETF (NYSEARCA:ISRA) has 112 holdings and a top ten holdings concentration of 49%.
One of the top holdings of the VanEck Israel ETF (NYSEARCA:ISRA) is Check Point Software Technologies Ltd. (NASDAQ:CHKP), a leading Israeli cybersecurity company. On November 2, Macquarie analyst Sarah Hindlian-Bowler took coverage of Check Point Software Technologies Ltd. (NASDAQ:CHKP) with a Neutral rating and a $129 price target.
At the close of Q3 2022, D E Shaw was the largest investor in Check Point Software Technologies Ltd. (NASDAQ:CHKP) and disclosed a position worth $105.28 million.
8. iShares Cybersecurity and Tech ETF (NYSEARCA:IHAK)
YTD Return as of December 8: -20.62%
The iShares Cybersecurity and Tech ETF (NYSEARCA:IHAK) invests in stocks of companies operating in the cyber security industry. The fund uses a representative sampling technique to track the returns of the NYSE FactSet Global Cyber Security Index. As of December 8, the iShares Cybersecurity and Tech ETF (NYSEARCA:IHAK) has lost 20.62% year to date and has outperformed the Nasdaq by over 9%. The fund is one of the best performing growth ETFs in 2022.
The iShares Cybersecurity and Tech ETF (NYSEARCA:IHAK) has an expense ratio of 0.47% and is yielding 0.80% to investors. The fund pays dividends on a semiannual basis. The iShares Cybersecurity and Tech ETF (NYSEARCA:IHAK) has 56 holdings and a top ten holdings concentration of 49.28%.
Among the top ten holdings of the iShares Cybersecurity and Tech ETF (NYSEARCA:IHAK), we have leading cybersecurity firm Palo Alto Networks, Inc. (NYSE:PANW). As of September 30, Arrowstreet Capital is the top investor in Palo Alto Networks, Inc. (NYSE:PANW) and has a position worth $464.28 million in the company.
On December 1, Redburn analyst Nina Marques took coverage of Palo Alto Networks, Inc. (NYSE:PANW) with a Buy rating and a $270 price target.
7. Invesco S&P 500 Equal Weight Technology ETF (NYSEARCA:RYT)
YTD Return as of December 8: -20.43%
The Invesco S&P 500 Equal Weight Technology ETF (NYSEARCA:RYT) invests in large-cap tech companies. The fund tracks the returns of the S&P 500 Equal Weight Information Technology Index and employs a full replication technique. The Invesco S&P 500 Equal Weight Technology ETF (NYSEARCA:RYT) has 77 holdings and a top ten holdings concentration of 15.34%. The fund’s assets under management, as of December 8, are valued at $2.14 billion and it has lost 20.43% year to date. The Invesco S&P 500 Equal Weight Technology ETF (NYSEARCA:RYT) has outperformed the Nasdaq Composite by over 9% and is placed among the best performing growth ETFs in 2022.
The Invesco S&P 500 Equal Weight Technology ETF (NYSEARCA:RYT) is offering a dividend yield of 0.63% and pays dividends on a quarterly basis. The fund’s expense ratio sits at 0.40%.
One of the top holdings of the Invesco S&P 500 Equal Weight Technology ETF (NYSEARCA:RYT) is GPU giant NVIDIA Corporation (NASDAQ:NVDA). As of September 30, Fisher Asset Management is the dominant investor in NVIDIA Corporation (NASDAQ:NVDA) and has stakes worth $1.46 billion in the company.
On November 17, Jefferies analyst Mark Lipacis maintained a Buy rating and his $225 price target on NVIDIA Corporation (NASDAQ:NVDA).
Here is what ClearBridge Investments had to say about NVIDIA Corporation (NASDAQ:NVDA) in its third-quarter 2022 investor letter:
“Likewise, graphics chip maker NVIDIA Corporation (NASDAQ:NVDA) (-19.9%) has struggled through the post-COVID-19 recovery but maintains dominant positions in key secular growth markets of AI and gaming. The company has significantly underperformed the index and semiconductor peers recently due to a gaming inventory correction, a decline in aggregate cryptocurrency demand and reduction in crypto mining intensity as well as concerns around the sustainability of data center sales.
We tactically trimmed our position early in 2022 due to concerns around these cycle dynamics but remain confident in the company’s long-term prospects.”
Some of the best-in-class names in tech include NVIDIA Corporation (NASDAQ:NVDA), Apple Inc. (NASDAQ:AAPL), Alphabet Inc. (NASDAQ:GOOG), and Microsoft Corporation (NASDAQ:MSFT).
6. First Trust NASDAQ Technology Dividend Index Fund (NASDAQ:TDIV)
YTD Return as of December 8: -18.74%
The First Trust NASDAQ Technology Dividend Index Fund (NASDAQ:TDIV) is an exchange traded fund that tracks the returns of the NASDAQ Technology Dividend Index by leveraging a full replication technique. The fund has an expense ratio of 0.50% and is offering a yield of 2.48%. The fund distributes dividends on a quarterly basis.
As of December 8, the First Trust NASDAQ Technology Dividend Index Fund (NASDAQ:TDIV) has lost 18.74% year to date, outperforming the Nasdaq composite by over 12%. The fund ranks among the best performing growth ETFs in 2022. The First Trust NASDAQ Technology Dividend Index Fund (NASDAQ:TDIV) has 95 holdings and a top ten holdings concentration of 57.75%.
Oracle Corporation (NASDAQ:ORCL) is among the top ten holdings of the First Trust NASDAQ Technology Dividend Index Fund (NASDAQ:TDIV). On December 5, Barclays analyst Raimo Lenschow raised his price target on Oracle Corporation (NASDAQ:ORCL) to $81 from $70 and maintained an Equal Weight rating on the shares.
As of the close of Q3 2022, First Eagle Investment Management is the dominant shareholder in Oracle Corporation (NASDAQ:ORCL) and has stakes worth $1.58 billion in the company.
Here is what First Eagle Investments had to say about Oracle Corporation (NASDAQ:ORCL) in its second-quarter 2022 investor letter:
“Oracle is one of the world’s largest independent enterprise software companies and has been reinventing itself for the cloud-computing environment, a transition pursued primarily through investments in organic research and design and smallish, well-priced acquisitions. That said, Oracle in June closed its largest-ever deal with the acquisition of Cerner, a designer of software to store and analyze medical records and other healthcare data.
Oracle took on additional debt to finance this all-cash acquisition and as a result plans to moderate its stock-buyback program to focus on debt reduction. Despite the weak quarter for the stock, Oracle’s operations remain strong; it reported better- than-expected results for its most recent quarter and issued upbeat guidance for the coming fiscal year.”
In addition to Oracle Corporation (NASDAQ:ORCL), by investing in growth ETFs, risk-averse investors can gain exposure to leading tech companies such as Apple Inc. (NASDAQ:AAPL), Alphabet Inc. (NASDAQ:GOOG), and Microsoft Corporation (NASDAQ:MSFT).
5. Invesco S&P SmallCap Information Technology ETF (NASDAQ:PSCT)
YTD Return as of December 8: -18.04%
The Invesco S&P SmallCap Information Technology ETF (NASDAQ:PSCT) invests in small-cap growth stocks. The fund tracks the returns of the S&P SmallCap 600 Capped Information Technology Index and employs a full replication technique. The Invesco S&P SmallCap Information Technology ETF (NASDAQ:PSCT) has an expense ratio of 0.29% and holds $316 million in assets under management, as of December 8.
The Invesco S&P SmallCap Information Technology ETF (NASDAQ:PSCT) is placed high on our list of the best performing growth ETFs in 2022. The fund has shed 18.04% year to date, as of December 8, and has outperformed the Nasdaq by over 12%. The fund has 71 holdings and a top ten holdings concentration of 32.70%.
Among the top holdings of the Invesco S&P SmallCap Information Technology ETF (NASDAQ:PSCT) we have Fabrinet (NYSE:FN), a leading provider optical packaging and precision optical, electro-mechanical and electronic manufacturing services. As of September 30, Royce & Associates is the dominant shareholder in Fabrinet (NYSE:FN) and has disclosed a position of $32.2 million.
On November 8, Needham analyst Alex Henderson raised his price target on Fabrinet (NYSE:FN) to $140 from $135 and reiterated a Buy rating on the shares.
4. First Trust Indxx Innovative Transaction & Process ETF (NASDAQ:LEGR)
YTD Return as of December 8: -16.28%
The First Trust Indxx Innovative Transaction & Process ETF (NASDAQ:LEGR) invests in growth stocks, and more particularly, blockchain technology stocks. The fund has an expense ratio of 0.65% and is yielding 3.22%. The fund pays out dividends on a quarterly basis. The First Trust Indxx Innovative Transaction & Process ETF (NASDAQ:LEGR) uses a full replication technique to track the returns of the Indxx Blockchain Index.
As of December 8, the First Trust Indxx Innovative Transaction & Process ETF (NASDAQ:LEGR) has fallen by 16.28 year to date and is ahead of the Nasdaq composite by over 13%. The fund is ranked among the best performing growth ETFs in 2022. The fund has 107 holdings and a top ten holdings concentration of 14.34%.
SAP SE (NYSE:SAP) is ranked among the top ten holdings of the First Trust Indxx Innovative Transaction & Process ETF (NASDAQ:LEGR). On December 2, Stifel analyst Brad Reback raised his price target on SAP SE (NYSE:SAP) to EUR 135 from EUR 130 and reiterated a Buy rating on the shares.
As of September 30, Fisher Asset Management is the top investor in SAP SE (NYSE:SAP) and has stakes worth $549.63 million.
Here is what Polen Capital had to say about SAP SE (NYSE:SAP) in its third-quarter 2022 investor letter:
“SAP SE (NYSE:SAP) is Europe’s largest software company and the global leader in enterprise resource planning (ERP) software. ERP is a software category that is particularly critical to business functions, and, therefore, has high retention rates even in times of economic stress. For the past several years, SAP has been going through several transitions, including moving to cloud-based SaaS (Software as a service) solutions and an initiative to better integrate its various software solutions. In recent quarters, we have seen increasing evidence that both transitions are being successfully executed, and the result should be a faster-growing, more consistent, higher margin, and more advantaged business. As investment costs from these transition programs wane, and as the benefits of higher growth continue, we expect that earnings will grow at a double-digit rate from next year (2023) onwards. In light of this, we believe the valuation is very attractive for longterm investors.”
3. KraneShares CSI China Internet ETF (NYSEARCA:KWEB)
YTD Return as of December 8: -15.68%
The KraneShares CSI China Internet ETF (NYSEARCA:KWEB) invests in Chinese growth stocks that belong to the IT services, internet services and infrastructure, software, application software, and internet software sectors. The fund uses a representative sampling technique to mirror the returns of the CSI Overseas China Internet Index. As of December 8, the fund has lost 15.68% year to date but has outperformed the Nasdaq by roughly 14.5%. This justifies its inclusion in our rankings of the best performing growth ETFs in 2022.
The KraneShares CSI China Internet ETF (NYSEARCA:KWEB) has an expense ratio of 0.69% and is yielding 8.70%. The fund’s assets under management, as of December 8, are valued at $5.78 billion. The fund has 43 holdings and a top ten holdings concentration of 63.50%.
One of the top holdings of the KraneShares CSI China Internet ETF (NYSEARCA:KWEB) is Chinese e-commerce giant, Alibaba Group Holding Limited (NYSE:BABA). As of September 30, Generation Investment Management is the dominant shareholder in Alibaba Group Holding Limited (NYSE:BABA) and has disclosed a position worth $360.74 million.
On November 18, UBS analyst Jerry Liu updated his price target on Alibaba Group Holding Limited (NYSE:BABA) to $135 from $140 and reiterated a Buy rating on the shares.
Here is what Polen Capital had to say about Alibaba Group Holding Limited (NYSE:BABA) in its third-quarter 2022 investor letter:
“Alibaba Group Holding Limited (NYSE:BABA) is the leading e-commerce company in China. The stock was weak over the quarter as they reported a quarterly revenue decline. The company has been heavily impacted by the continued covid-19 lockdowns throughout China and the aggressive rate increases and deteriorating outlook for China’s economy have weighed heavily on the stock. The share price has also been under pressure due to the U.S. Securities and Exchange Commission’s plans to delist Chinese tech stocks in 2024 if they do not provide access to audit files.”
2. iShares North American Tech-Multimedia Networking ETF (NYSEARCA:IGN)
YTD Return as of December 8: -13.66%
The iShares North American Tech-Multimedia Networking ETF (NYSEARCA:IGN) employs a representative sampling technique to mirror the returns of the S&P North American Technology Multimedia Networking Index. As of December 8, the fund has lost 13.66% year to date, outperforming the Nasdaq by over 16%. The iShares North American Tech-Multimedia Networking ETF (NYSEARCA:IGN) is one of the best performing growth ETFs in 2022.
The iShares North American Tech-Multimedia Networking ETF (NYSEARCA:IGN) has an expense ratio of 0.40% and is offering a dividend yield of 0.25%. The fund has 25 holdings and a top ten holdings concentration of 67.58%.
Among the top holdings of the iShares North American Tech-Multimedia Networking ETF (NYSEARCA:IGN) we have Cisco Systems, Inc. (NASDAQ:CSCO). On November 17, Cowen analyst Paul Silverstein raised his price target on Cisco Systems, Inc. (NASDAQ:CSCO) to $61 from $60 and maintained an Outperform rating on the shares.
As of September 30, Two Sigma Advisors is the dominant stockholder in Cisco Systems, Inc. (NASDAQ:CSCO) and has a position worth $388 million.
1. ProShares S&P Technology Dividend Aristocrats ETF (BATS:TDV)
YTD Return as of December 8: -11.68%
The ProShares S&P Technology Dividend Aristocrats ETF (BATS:TDV) invests in dividend paying growth stocks. The fund tracks the performance of the S&P Technology Dividend Aristocrats Index and employs a full replication technique. The ProShares S&P Technology Dividend Aristocrats ETF (BATS:TDV) has an expense ratio of 0.45% and is yielding 1.54%. The fund pays out dividends on a quarterly basis.
As of December 8, the ProShares S&P Technology Dividend Aristocrats ETF (BATS:TDV) has lost 11.68% year to date and has outperformed the Nasdaq by more than 18%. This justifies its place among the best performing growth ETFs in 2022. The fund has 41 holdings and a top ten holdings concentration of 26.16%.
Texas Instruments Incorporated (NASDAQ:TXN) is one of the most prominent holdings of the ProShares S&P Technology Dividend Aristocrats ETF (BATS:TDV). As of September 30, First Eagle Investment Management is the top investor in Texas Instruments Incorporated (NASDAQ:TXN) and has a stake worth $556 million.
On October 26, Deutsche Bank analyst Ross Seymore revised his price target on Texas Instruments Incorporated (NASDAQ:TXN) to $155 from $160 and reiterated a Hold rating on the shares.
Here is what Diamond Hill Capital had to say about Texas Instruments Incorporated (NASDAQ:TXN) in its third-quarter 2022 investor letter:
“Other top contributors in Q3 included health insurance company Humana, semiconductor manufacturer Texas Instruments Incorporated (NASDAQ:TXN) and home improvement retailer Home Depot. Shares of Texas Instruments outperformed as the COVID lockdowns eased in China, and customers could accept the product shipments leading to an upside in expectations.”
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Disclosure: None. 10 Best Performing Growth ETFs in 2022 is originally published on Insider Monkey.
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