Top 5 Growth ETFs to Own For 2026 and Beyond, #289
Last week, we covered the best investments to preserve your money, but this week we are shifting gears to focus on growth. For retirees, the goal is to have an income that outpaces inflation, and historically, the best way to achieve that is by having 50% to 70% of your portfolio invested in stock funds.
In this episode, I break down five specific Exchange Traded Funds (ETFs) that can help you grow your wealth in 2026. I discuss why I prefer ETFs over mutual funds, specifically focusing on cost, transparency, and liquidity, and provide the exact ticker symbols and expense ratios for the funds I use with my own clients to build diversified, growth-oriented portfolios.
If you are willing to accept some volatility to achieve higher long-term returns, this episode provides a blueprint for structuring the equity side of your retirement plan.
You will want to hear this episode if you are interested in...
[00:00] Top 5 Growth ETFs to Own For 2026.
[02:55] Why ETFs are superior to mutual funds.
[05:23] The core holding: S&P 500 ETF.
[09:28] Capturing extra growth with SPYG.
[06:33] Small Cap stocks and the profitability factor.
[13:38] Investing in the Developed World ex-US.
[15:43] High growth potential in Emerging Markets.
Why Choose ETFs?
Before diving into specific funds, it is important to understand why Exchange Traded Funds (ETFs) are often a better choice than traditional mutual funds. I prefer them for four main reasons:
Cost: ETFs often have significantly lower expense ratios, some less than a tenth of a percent, compared to actively managed funds that can charge up to 2%.
Performance: Many active funds struggle to outperform their benchmarks over time.
Transparency: You can see exactly what an ETF holds, whereas mutual funds may only report holdings twice a year.
Liquidity: You can trade ETFs throughout the day while the market is open, rather than waiting for the market close price required by mutual funds.
The US Core: S&P 500 and Growth Variations
For the core of a growth portfolio, I look to the S&P 500, which has averaged a 15% return over the last five years.
State Street SPDR Portfolio S&P 500 ETF (SPYM/SPSM): This fund tracks the S&P 500 but was created to offer a lower cost (0.02% expense ratio) compared to the original SPY ETF. It is a massive fund with over $100 billion in assets, heavily weighted toward large technology companies like Nvidia, Apple, and Microsoft.
S&P 500 Growth ETF (SPYG): If you want to lean more aggressively into growth, this fund tracks S&P 500 companies with high sales growth and momentum. It has a 3-year average return of 29% and a very low expense ratio of 0.04%.
Diversifying with Small Caps
While the S&P 500 is dominant, it has had "lost decades" in the past where returns were negative. To diversify, I recommend the S&P 600 Small Cap ETF.
Unlike the Russell 2000, the S&P 600 index requires companies to be profitable, which filters out lower-quality stocks.
Although it has lagged recently, small caps may be poised for a comeback due to economic shifts and tariffs. The expense ratio for this fund is just 0.03%.
International Opportunities
The US has outperformed international markets recently, but that trend could reverse.
Developed World ex-US (SPDW): This fund invests in developed economies like Japan, the UK, and Canada. It offers exposure to major global players like Samsung and AstraZeneca with a low expense ratio of 0.03%.
Emerging Markets (SPEM): For higher potential growth, this fund targets countries with rapidly growing GDPs, such as China, Taiwan, and India. These economies have a growing middle class, which can drive corporate earnings. The fund holds major companies like Taiwan Semiconductor and Alibaba.
Resources Mentioned
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