Growth ETFs focus on companies expected to increase revenue and earnings faster than the broader market. In Canada, this typically means heavy exposure to U.S. technology stocks (through NASDAQ-100 ETFs) or globally diversified equity portfolios that tilt toward growth sectors. The trade-off is higher volatility — growth ETFs can drop 30-40% in a downturn, as investors saw in 2022, but they have historically delivered the strongest long-term returns for patient investors. For the broader product map, start with our ETFs and index funds hub.
If you have a 10+ year time horizon, a high risk tolerance, and do not need the income from dividends, growth ETFs belong in your portfolio. If you are within 5 years of needing the money, the volatility risk is too high — consider balanced ETFs like VBAL or XBAL instead.
That time-horizon decision is easier with asset allocation by age.
Best Growth ETFs Canada 2026
| ETF | Ticker | MER | Focus | 5Y Return (approx) |
|---|---|---|---|---|
| iShares NASDAQ 100 (CAD-Hedged) | XQQ | 0.39% | NASDAQ-100 | ~18% |
| BMO NASDAQ 100 | ZQQ | 0.39% | NASDAQ-100 | ~18% |
| TD Global Tech Leaders | TEC | 0.40% | Global tech | ~16% |
| iShares Core Equity ETF Portfolio | XEQT | 0.20% | Global equity | ~11% |
| Vanguard All-Equity ETF Portfolio | VEQT | 0.24% | Global equity | ~11% |
| Vanguard Growth ETF Portfolio | VGRO | 0.24% | 80/20 growth | ~9% |
| iShares Core Growth ETF Portfolio | XGRO | 0.20% | 80/20 growth | ~9% |
| BMO MSCI USA High Quality | ZUQ | 0.30% | US quality growth | ~15% |
Growth Strategy Comparison
If you want to isolate just the US large-cap growth engine, compare these with best S&P 500 ETFs in Canada.
Each growth strategy has a different risk-return profile. NASDAQ-100 ETFs (XQQ, ZQQ) are concentrated in roughly 100 U.S. tech and growth stocks — heavily weighted toward Apple, Microsoft, Nvidia, Amazon, and Meta. This concentration has driven exceptional returns but also means a tech downturn hits hard. All-equity ETFs like XEQT and VEQT spread across 9,000+ global stocks, offering growth with far more diversification. The 80/20 options (XGRO, VGRO) add a 20% bond allocation as a buffer against the worst drawdowns.
| Strategy | Best ETF | Volatility | Expected Return | Risk Level |
|---|---|---|---|---|
| NASDAQ-100 | XQQ/ZQQ | Very high | Very high | Aggressive |
| Global tech | TEC | Very high | Very high | Aggressive |
| Global equity (100%) | XEQT/VEQT | High | High | Moderate-high |
| Growth balanced (80/20) | XGRO/VGRO | Moderate-high | Moderate-high | Moderate |
Growth of $10,000 Over 20 Years
Compound returns make a dramatic difference over long periods. The gap between 9% (VGRO) and 18% (XQQ) looks modest as an annual rate but produces wildly different outcomes over 20 years. However, past NASDAQ returns include one of the strongest bull markets in history — assuming 18% going forward is unrealistic. Most financial planners use 6-8% for long-term equity projections.
| ETF | At Estimated Return | Growth |
|---|---|---|
| XQQ (~18%) | $27,393,000* | Exceptional |
| TEC (~16%) | $19,461,000* | Very strong |
| XEQT (~11%) | $80,623 | Strong |
| VGRO (~9%) | $56,044 | Solid |
Past NASDAQ returns are above historical averages and may not repeat.
Who Should Buy Growth ETFs
Growth ETFs are not for everyone. They work best for young investors with decades until retirement, those who can stomach a portfolio dropping 30-40% without panic-selling, and investors who do not need dividend income. If you are approaching retirement or have a lower risk tolerance, a balanced ETF (VBAL, XBAL) or dividend-focused portfolio is more appropriate.
| Profile | Recommended ETF |
|---|---|
| Maximum growth, highest risk | XQQ or TEC |
| Global diversified growth | XEQT or VEQT |
| Growth with some stability | XGRO or VGRO |
| Approaching retirement | ⚠️ Consider VBAL or bonds |
If you want to add non-US growth diversification rather than more US concentration, see best international ETFs in Canada and best emerging market ETFs in Canada.
Growth ETFs vs dividend ETFs: the debate
A common question for Canadian investors is whether to tilt toward growth (capital appreciation) or dividends (current income). The empirical evidence suggests total return matters most:
| Strategy | Pros | Cons |
|---|---|---|
| Growth ETFs (XEQT, XQQ) | Higher total return over long periods; tax-efficient (capital gains vs income) | Higher volatility; low current yield; painful drawdowns |
| Dividend ETFs (VDY, XDIV) | Regular income; psychological comfort; lower volatility | Lower total return over 20+ year periods; Canada-heavy; interest-like tax in RRSP |
| Balanced (XGRO, VGRO) | Moderate return; lower volatility than 100% equity | Bonds dilute returns in rising equity markets |
For a 10+ year time horizon, a global equity ETF like XEQT or VEQT has historically delivered better total returns than a Canadian dividend-only portfolio. Dividend stocks feel psychologically safer because of the regular income, but the underlying total return (yield + growth) has tended to lag diversified global equity.
Recommendation: Use growth ETFs for the equity core of your portfolio. If you need regular income in retirement, switch to dividend ETFs at that point — or simply sell a small number of growth ETF units quarterly (“synthetic dividends”).