Growth stocks and ETFs had a rough start in 2025, but with headwinds giving way to tailwinds, the second half of the year can be a good one for investors. ETFs that prioritize growth stocks give investors a better chance of outperforming the stock market since the companies in these funds report elevated revenue and net income growth.
Some growth ETFs are better than others, but if you’re looking for some funds with double-digit upside potential for the back half of 2025, you may want to consider these picks.
ARK Innovation ETF (ARKK)
Cathie Wood has become one of the most well-known investors over the past decade. She is a pure growth investor who you’d never spot holding shares in a mature value stock. The ARK Innovation ETF (BATS:ARKK | ARKK Price Prediction) invests in innovative trends. Tesla (NASDAQ:TSLA) is almost always the top position in the portfolio, and that remains true to this day.
The EV maker comprises roughly 10% of ARKK’s total funds. However, the next two picks make ARKK more intriguing. Coinbase (NASDAQ:COIN) and Circle (NASDAQ:CRCL) are the next two positions, and they make up more than 16% of the total portfolio. Crypto has been booming lately, especially with the Trump Administration’s pro-crypto stance. Furthermore, Circle is benefitting from the return of IPO mania.
The fund hasn’t always done well. Shares crashed in 2022, and you can see it based on the fund’s dismal 0.12% annualized return over the past five years. However, it’s also up by 19.8% over the past three years and is up by more than 50% over the past year. ARKK is the type of fund to outperform amid lower interest rates, and the favorable crypto tailwinds can lay the groundwork for additional gains.
iShares Semiconductor ETF (SOXX)
Tech has been the big theme for most investors who consistently beat the market, and the iShares Semiconductor ETF’s (NASDAQ:SOXX) 0.35% expense ratio makes it really affordable to secure a winner. The fund has an annualized 22.7% gain over the past decade, so if the market rallies, expect this one to come out on top.
SOXX’s top holdings are plenty of chip companies, with Broadcom (NASDAQ:AVGO), Nvidia (NASDAQ:NVDA), and Advanced Micro Devices (NASDAQ:AMD) making up approximately one-quarter of the fund’s total assets. Nvidia is actually the only Magnificent Seven stock that shows up in the top 10 holdings.
Any tailwinds in artificial intelligence, including big investments from tech giants, should help this ETF rally higher.
Vanguard Information Technology ETF (VGT)
The Vanguard Information Technology ETF (NYSEARCA:VGT) is a more diversified tech play that has a microscopic 0.09% expense ratio. The fund’s top 10 holdings make up 59% of its total assets. Nvidia, Microsoft (NASDAQ:MSFT), and Apple (NASDAQ:AAPL) are the top three holdings, and they make up almost half of the fund’s total assets.
It’s a very top-heavy fund, but you can’t argue with results. VGT has delivered an annualized 20.4% return over the past decade. The gains have accelerated in recent years, with VGT producing an annualized 26.4% gain over the past three years.
Invesco S&P 500 Top 50 ETF (XLG)
The Invesco S&P 500 Top 50 ETF (NYSEARCA:XLG) takes on the mentality of less being more. This fund only invests in the top 50 stocks in the S&P 500, and as a result, it has outperformed the benchmark over several years.
XLG has an annualized 17.5% return over the past five years. The fund’s ability to prioritize the Magnificent Seven stocks over the laggards you’ll usually find at the bottom of the S&P 500 has helped the fund deliver strong returns.
XLG allocates 61% of its total assets into its top 10 holdings. Unsurprisingly, those top 10 stocks are filled with Magnificent Seven stocks. It’s more top-heavy into these stocks than the S&P 500, and that has worked well for investors in the long run.
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