The Best Growth Funds for UK Investors: Top Picks & How to Invest in 2024

Vanguard Growth ETF is an index fund that tracks the largest and highest-growth companies listed in the US equity market and presents a unique opportunity for exposure to the fastest-growing outfits in the stock market. In fact, The Vanguard Growth ETF is one of the best-performing funds in the UK market today. This exchange-traded fund seeks to track the performance of the CRSP US Large Cap Growth Index, which includes companies that exhibit strong growth characteristics. Over the past decade, the Vanguard Growth ETF has consistently been ranked among the best-performing funds in its category. This is due in part to the fund's focus on investing in companies with strong earnings growth potential and competitive advantages.

Investors who are looking for the best-performing funds in the large-cap growth category should consider the Vanguard Growth ETF as part of their investment strategy. The fund's low expense ratio, diversified holdings, and exposure to some of the fastest-growing companies in the stock market make it an attractive option for investors seeking growth opportunities. In addition, the fund's passive management style means that investors can benefit from the performance of the index it tracks, while also enjoying the potential tax efficiency and lower fees associated with passive investing. Overall, the Vanguard Growth ETF is a strong choice for investors seeking exposure to the best-performing funds in the large-cap growth space.

Due to its tight tracking abilities, stellar performance concentrated allocation, and low expense ratio of 0.4%, VUG is among the top growth funds to invest money in.

The fund offers an average 10-year total return of 13.28%. Since early 2020, its leading 10 holdings have grown in concentration from 40% to 49% as of early 2023. The fund also received a Gold rating from Morningstar, excelling in every criterion. Its major holdings include;

• Apple Inc

• Microsoft Corp

• Amazon.com

Managed by BlackRock Advisors, BlackRock Capital Appreciation follows a large-cap growth strategy and mainly tracks Russell 1000 Growth Index, with deviations remaining less than 5% over the last five years. In the stock market, the fund drops all assets that fall below $4 billion in market cap, which ensures sustained liquidity. BlackRock Capital Appreciation Fund is one of the top-performing funds in the stock market today. Managed by a team of experienced investment professionals, the fund invests primarily in large-cap growth stocks, seeking long-term capital appreciation for its investors. The fund has consistently been ranked among the top-performing funds in its category, thanks to its focus on investing in high-quality growth companies with strong fundamentals and competitive advantages.

The fund holds an expense ratio of around 0.64% and has an average 10-year total return of approximately 12.16%. Since 2022, the fund is lagging behind its benchmark in terms of total returns – yet given its stellar performance in navigating the pandemic outset, where total returns amounted to 40.59% compared to the benchmark return of 38.49%, analysts believe in its sustainability. Its current Morningstar rating is Silver. Its leading holdings include;

• Microsoft Corp

• Apple Inc

• Amazon.com

Managed by BlackRock, the fund aims to track the performance of the FTSE 100 Index, which is an index of the 100 largest publicly traded companies listed on the London Stock Exchange by stock market cap. In the stock market, the fund currently has over £11 billion in client assets under management and is available for investment for ISA and SIPP account holders.

The fund aims at a relatively low expense ratio of 0.07%, and a 10-year average return of %, lagging just behind its benchmark average return of 6.30%. Its top holdings include;

• Shell PLC

• AstraZeneca PLC

• HSBC Holdings PLC

Managed by the long-established investment management service Fidelity, the underlying assets of Fidelity Growth Company K6 largely overlap with the Russell 1000 Growth Index with a few nuances.

The management strongly follows fast-growing industries and outfits with distinctive products and long-term focused management. One drawback is that the fund was only established in 2019, thus lacking a long-term tracking record.

The fund’s expense ratio is 0.45% and has a three-year average total return of 13.22% compared to its benchmark category return of 6.11%. The fund holds a Gold rating from Morningstar, and one of its fund managers Steve Wymer is one of the industry’s longest-tenured large-growth managers. Its major holdings include;

• Apple Inc

• NVIDIA Corp

• Microsoft Corp

With over $14 billion in client assets under management, SPYG follows S&P 500 Growth, which includes the growth-oriented companies included in the S&P 500, a market-cap-weighted index of 500 leading publicly traded companies in the US. These companies in the stock market have positive earnings and tend to maintain durable competitive advantages like Amazon.

The fund’s expense ratio is a very low 0.04% and has a 10-year average total return of 13.57% compared to the category benchmark average of 12.09%. Its leading holdings include;

• Apple Inc

• Microsoft Corp

• Alphabet Class A

The Liontrust Sustainable Future UK Growth Fund is an actively managed open-end fund investing primarily in growth companies that meet their rules for environmental and social responsibility. The fund's investment strategy includes rigorous ESG analysis, engagement with companies, and exclusion of certain sectors such as tobacco and controversial weapons.

The fund’s max annual charge is 0.40% and has a 10-year average return of 7.35%, which is 1.03% higher than its benchmark category index FTSE All Share TR GBP. Its leading holdings include;

• Unilever PLC

• Smurfit Kappa Group PLC

• AstraZeneca PLC

The T. Rowe Price All-Cap Opportunities Fund is an actively managed mutual fund that maintains a diversified portfolio of multi-cap growth companies. In the spirit of diversification of market capitalisation, the company changed its benchmark from Russell 1000 Growth index to the Russell 3000, which contains about 98% of all listed equities.

The fund’s expense ratio is 0.76% and maintains a 10-year average total return of 12.09%, which is lagging behind its index benchmark average of 13.18%. Yet, the company holds a Silver rating from Morningstar and according to the analysts, has the right management to deliver in the long haul. Its leading holdings include;

• Visa Inc Class A

• Apple Inc

• Microsoft Corp

Managed by Fidelity, European Growth Fund is an actively managed open-end investment fund that primarily invests in growth companies within Europe. As a small-sized fund, the company manages just over £5 billion in client funds and maintains an ongoing charge of 1.04%. Fidelity Investments is a leading provider of investment funds and financial services. With over 70 years of experience, Fidelity has developed a reputation for offering high-quality investment products to meet the needs of individual and institutional investors alike. Fidelity Funds provide investors with a diverse range of investment options across multiple asset classes, including equities, fixed income, and alternative investments. These investment funds are managed by a team of experienced investment portfolio managers who use a range of analytical tools and investment strategies to help achieve the fund's investment objectives. Fidelity Funds offer investors the potential for long-term growth and income, while also providing diversification benefits to help manage risk. With a broad range of investment funds to choose from, investors can find the right solution to meet their investment goals and risk tolerance.

Established in 2016, the fund has a 5-year average return of 2.77% which is currently 1.19% lower than its benchmark index Europe Large-Cap Blend Equity. Its notable holdings include;

• Unilever PLC

• Roche Holding AG

• Reckitt Benckiser Group PLC

Managed by Charles Schwab Investment Management, Schwab US Large-Cap Growth ETF is an exchange-traded fund that aims to track the performance of the Dow Jones U.S. Large-Cap Growth Total Stock Market Index.

The stock market index, and thus the fund, also includes value stocks as well as growth stocks – although it tends to skew to the latter predominantly. This balance is not very common among growth stocks.

The fund has a low expense ratio of 0.040%, and has a 10-year average total return of 14%, outpacing its benchmark index average of 13.18%. As of 2020, the fund focuses on increasing its standard market cap and focuses on mega-cap outfits. Its notable holdings include;

• Apple Inc

• Microsoft Corp

• Amazon.com Inc

Managed by BlackRock, iShares Russell Mid-Cap Growth ETF is an exchange-traded fund that tracks the performance of the Russell Midcap Growth Index. The firms represented in the index tend to have rich valuations and solid projections, which makes it a great fund for investors who are looking into diversifying their investment portfolio with promising mid-cap outfits.

The fund has a low expense ratio of 0.230%, and has a 10-year average total return of 11.18%, lagging just behind its benchmark index average of 11.74%. Its notable holdings include;

• Synopsys Inc

• Cadence Design Systems Inc

• Chipotle Mexican Grill Inc

eToro’s offerings are limited: the platform doesn’t have a proper screener to filter down the search by risk level, management type, or region, and it only includes 300 exchange-traded funds at the time of writing.

The investment platform combines commission-free ETF trading with a fairly intuitive user interface and a wealth of educational materials has been put together neatly in its Academy. The interactive components of social trading, such as feeds or profiles, make up the main focus of eToro, with which novice traders can expand their knowledge greatly. Besides mutual funds, eToro is also an excellent platform to locate and invest in some of the best ETFs in the UK.

	Name	Score	Visit	Disclaimer
	eToro	8.7	Visitetoro.com					Don’t invest unless you’re prepared to lose all the money you invest.

With exposure to over 5,400 ETFs and other funds, professional-grade trading tools, and accessible charges, IG finds perfect harmony between affordability and quality. Among its most outstanding features is the Smart Portfolio capability.

Drawing from BlackRock’s allocation models and managed by in-house experts at IG, which holds over four decades of experience under their belt, the smart portfolio feature is a great opportunity for hands-off growth fund investors. The diversified portfolio library is categorised mainly to cater to five investment risk profiles, ranging from conservative to aggressive, and covers a range of asset classes including funds.

	Name	Score	Visit	Disclaimer
	IG	8.9	Visitig.com					Spread bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 70% of retail investor accounts lose money when trading spread bets and CFDs with this provider. You should consider whether you understand how spread bets and CFDs work, and whether you can afford to take the high risk of losing your money.

Vanguard is a long-established investment management company that has been maintaining its ethos prioritising long-term investing over short-term since its inception. The firm’s structure is quite unique as it is owned by its funds, rather than shareholders, so the focus remains on fair and sustained investments rather than profits.

Besides the curve-bending Vanguard funds, the platform includes a far-reaching catalogue of growth funds that are scannable with ease through a funds screener. The ongoing costs for funds average 0.20%.

	Name	Score	Visit	Disclaimer
	Vanguard	6.0	Visitinvestor.vanguard.com

• Identifying Risk Tolerance: Growth funds differ in their approach to growth, which can be conservative, moderate, or aggressive. Conservative funds are suitable for long-term investors who prioritise wealth preservation along with taking advantage of market growth and allocate some of their investments in growth stocks.

  Aggressive growth funds are at the riskiest end of the spectrum, they make use of derivative products and usually yield substantial returns after a decade. Growth funds sit in the middle; they tend to be riskier than conservative but safer than aggressive funds, and require a long-term investment horizon.

• Deciding on Active or Passive Management: It’s possible to find both actively and passively managed growth funds. Active management includes achieving superior performance by being actively selective, and tends to require a well-paid management team of analysts – thus is costlier.

  Passive management is often dubbed as matching the market, rather than beating it. Underlying funds are usually automatically selected rather than by the fund managers, and track a certain market segment. When a mutual fund or exchange-traded fund (ETF) is created, it is designed to track a specific market index or meet a specific investment objective. To achieve this objective, the fund managers select a group of individual securities or other assets, known as underlying funds or constituents, that will be held in the fund. However, in many cases, the underlying funds are selected automatically, rather than being handpicked by fund managers, based on pre-established criteria such as the fund's investment objective or the market index it is designed to track

  In some cases, the fund managers may have discretion over the selection of underlying funds.

  This decision presents a trade-off between high ongoing costs and potentially higher returns – a decision to be made depending on long-term investment goals and personal financial means.

• Past performance: As with every fund, evaluating past performance is key when choosing growth funds. What is the tracking difference? Does the fund’s management team have a longstanding history of success? What are their average returns like, and how does it compare to the benchmark index? There are various risks involved in investing in securities, including market risks. The previous performance of a security does not necessarily guarantee future performance and should not be taken as an indicator of future results.

As with any asset class, growth funds come with their own set of risks and benefits;