Top Megacap Expansion ETF to Invest in with a $500 Budget at this Moment
This year, growth stocks have flourished as investors anticipate an enhanced economic landscape and technology companies operating within the high-prospect sector of artificial intelligence (AI). This trend has contributed to the overall market's advance, causing the S&P 500 to rise by 23% over the past 10 and a half months. Furthermore, the S&P 500 affirmed its position in a bull market early on in the year, further fostering investor optimism and an insatiable appetite for growth stocks.
Companies that invest in growth tend to prosper in bullish economic conditions, making them excellent investments during periods of market strength. Given our preference for long-term investing, you may even hold onto these companies for multiple bullish market cycles, potentially earning substantial rewards in the process.
As we aim to capitalize on today's bull market, acquiring several high-quality growth companies becomes a smart move. Handily, this can be achieved through a single investing strategy: investing in an exchange-traded fund (ETF). ETFs invest in a diverse range of stocks, granting you access to numerous leading companies across various sectors. ETFs can replicate a major index, such as the S&P 500, or focus on an industry, like consumer goods, or companies that offer growth or dividend payments. ETFs are traded daily, just like stocks, enabling you to buy or sell them effortlessly. By investing in an ETF, you gain entry to the best of an industry or investment theme without having to delve into the particular topic or become an expert in it.
One primary difference between investing in a stock and investing in an ETF is ETFs come with management fees, expressed as an expense ratio. It's crucial to opt for ETFs with an expense ratio of less than 1% to minimize costs over time and enhance potential returns.
Now, let's focus on the leading growth ETF to purchase today, and that's the Vanguard Mega Cap Growth ETF (MGK -0.05%). With an expense ratio of 0.07% and trading around $330, it's an affordable option, and this fund grants access to top growth stocks that have spearheaded market gains this year and demonstrate the potential to thrive over the long term.
The Mega Cap ETF's principal industry sector - at 61% - presently is, unsurprisingly, technology. The ETF follows the CRSP U.S. Mega Cap Growth Index, adhering to this index's current selections - if one day another industry surpasses technology, the index and the ETF would prioritize that specific industry. This ensures you'll consistently be invested in the market's top growth stocks.
The ETF's most significant holdings at present
And just as industry sectors change, so do individual stocks within the index and ETF. Today, the Mega Cap ETF's principal holdings are Apple, Nvidia, and Microsoft, each accounting for over 12%.
However, it's essential not to view this fund as purely a tech investment. The Mega Cap ETF is an effective method of diversifying across numerous growth-oriented companies, as it includes stocks from a total of 10 industries. Additional heavily weighted stocks within the fund include pharmaceutical powerhouse Eli Lilly and electric vehicle pioneer Tesla.
This investment strategy has proven competitive this year and over the long term. The Mega Cap ETF is projected to increase by 27% in 2024, surpassing the S&P 500's gains. Additionally, over a ten-year period, the ETF's performance is much more impressive, with a 300% increase compared to the S&P 500's advance of approximately 187%.
In conclusion, investing in the Mega Cap ETF is an effortless way to secure instant access to a diverse basket of top growth stocks - stocks that could potentially provide you with returns during this bull market and over the long term.
Given the current bull market, investing in growth-oriented companies through ETFs can be a smart move. For instance, the Vanguard Mega Cap Growth ETF (MGK) with a low expense ratio of 0.07% provides access to top growth stocks in various sectors, including technology, pharmaceuticals, and electric vehicles. This ETF, which is heavily invested in Apple, Nvidia, and Microsoft, is projected to increase by 27% in 2024, surpassing the S&P 500's gains, making it an attractive option for long-term investors seeking to capitalize on the market's growth trends in finance and investing.
