Growth Investing Definition

Learn the definition of growth investing and other ETF terminology from the etf.com glossary.

Learn more about Growth Investing

Growth investing is an investment strategy that focuses on buying and holding shares of companies that are expected to grow at a faster rate than the overall market. These companies are often younger, smaller, and more volatile than more established companies, but they also have the potential to generate higher returns. Growth ETFs typically invest in companies with high growth potential, as measured by factors such as earnings growth, sales growth, and market share. These ETFs can be a good way to gain exposure to companies that are poised for strong growth in the future. However, growth ETFs are also riskier than ETFs that invest in more established companies. This is because growth companies are more likely to experience volatility and downturns. Investors should carefully consider their risk tolerance before investing in growth ETFs.

Related Terms

Yield, Exchange-Trade Fund (ETF)