The growth potential of an ETF, regardless of how powerful it is, usually can’t match the growth potential of an individual stock. A stock can soar almost unreservedly, but an ETF’s growth is bound by the collective. But this also has an upside.
Unlike a stock that can fall to great depths if certain market conditions are triggered, an ETF’s fall is cushioned and balanced thanks to constituents moving in opposite directions.
And an ETF’s growth can be more consistent in the long term than a stock’s, making it ideal for predictable growth goals.
An agricultural ETF
If you are interested in an investment that might double your capital in a decade and give your portfolio more ESG points, iShares Global Agriculture Index Fund (TSX:COW) can be a good option. As the name suggests, the ETF tracks the performance of the Global Agriculture Index, which leans quite heavily towards the U.S. (over 80% of the weight).
There are 36 holdings in total, including companies from Canada, Italy, and Israel, though the bulk of the weight is distributed among the top 10 holdings.
It comes with a medium-risk rating, making it relatively safe, and a high MER of 0.72%, which might be worth it considering the fund’s return potential. $10,000 invested in the fund a decade ago would have returned $40,000 by now, but even if we correct for the post-pandemic “skew,” the ETF can double your capital within a decade.
A U.S. equity ETF
Another U.S.-heavy ETF is AGFiQ US Equity ETF (TSX:QUS). It tracks the performance of a basket of securities made up of 87 U.S. companies, and the top four holdings are the top tech companies in the U.S. that carry over one-fifth of the fund’s weight as a whole.
The MER of 0.45%, while not as high as the iShares ETF’s MER, is relatively high compared to U.S.-based ETFs that track broad market indexes like S&P 500 or NASDAQ 100.
However, the MER loses much of its bite if you consider the return potential of the ETF. In the last five years, the fund has grown 87% at its best (from the lowest to the highest point), which indicates that it could double your capital in well under a decade, maybe as early as six years. It makes annual distributions.
A tech ETF
U.S. tech is almost always a wise choice when looking for rapid growth. Harvest Tech Achievers Growth & Income ETF (TSX:HTA) is a great example. The fund rose 113% in the last five years alone before slumping almost 25%, which means you can buy it at a discount.
This ETF aims to replicate the performance of 20 of the largest tech companies (equally weighted — almost) in the United States. With this particular focus, it’s not surprising that the fund carries a relatively high MER of 0.85%.
What is surprising, though, is the fact that the ETF has a medium-risk rating, and it makes a monthly distribution. The yield is quite attractive as well, especially now (thanks to the slump) at 7.3%.
Foolish takeaway
ETF investing is ideal for novice investors. It gives them an easy way to start growing their capital with relatively minimal risk and achieve predictable growth goals without the need to actively manage and rebalance the portfolio every quarter or so.
