Before you consider investing, ask yourself whether you’re comfortable with that level of volatility. Growth ETFs often earn explosive returns when the market is thriving, but they can also be hit much harder during downturns. If you’re uncomfortable with the idea of facing more severe ups and downs, growth ETFs could be a stressful investment.

That said, this type of investment could also help you earn much higher-than-average returns over time. The Vanguard Growth ETF has earned an average rate of return of 15.17% per year over the past 10 years. By comparison, the Vanguard S&P 500 ETF has seen an average return of just 12.96% per year in that time, while the stock market as a whole has earned an average of 10% per year over decades.

Because growth ETFs can be more unpredictable, there are no guarantees that you’ll continue seeing 15% average annual returns. But even slightly higher-than-average returns could still earn you a lot of money.

If you were to invest $400 per month, here’s approximately how much you could accumulate, depending on whether you’re earning an 11%, 13%, or 15% average annual return:

Data source: Author’s calculations via investor.gov. Table by author.

The most important thing to keep in mind when investing is that a long-term outlook is key, and that’s especially crucial with growth ETFs. We’re bound to face a downturn sooner or later, and even the most seasoned investors are often shaken by volatility. But by holding your investment for decades, you can ride out the storm and take advantage of long-term gains.

There’s no single best way to invest, and everyone’s approach will be different. But if you’re looking for a lower-effort investment that could help make you a lot of money over time, the Vanguard Growth ETF could be a great option.

Ever feel like you missed the boat in buying the most successful stocks? Then you’ll want to hear this.

On rare occasions, our expert team of analysts issues a “Double Down” stock recommendation for companies that they think are about to pop. If you’re worried you’ve already missed your chance to invest, now is the best time to buy before it’s too late. And the numbers speak for themselves:

• Amazon: if you invested $1,000 when we doubled down in 2010, you’d have $22,819!*

• Apple: if you invested $1,000 when we doubled down in 2008, you’d have $42,611!*

• Netflix: if you invested $1,000 when we doubled down in 2004, you’d have $444,355!*

Right now, we’re issuing “Double Down” alerts for three incredible companies, and there may not be another chance like this anytime soon.

See 3 “Double Down” stocks »

*Stock Advisor returns as of November 11, 2024

Katie Brockman has positions in Vanguard Index Funds – Vanguard Growth ETF and Vanguard S&P 500 ETF. The Motley Fool has positions in and recommends Apple, Microsoft, Nvidia, Vanguard Index Funds – Vanguard Growth ETF, and Vanguard S&P 500 ETF. The Motley Fool recommends the following options: long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft. The Motley Fool has a disclosure policy.

1 Magnificent Growth ETF That Could Turn $400 Per Month Into $1.4 Million While Barely Lifting a Finger was originally published by The Motley Fool