I have a confession: I'm not the best growth investor. Sure, I've invested in ASX growth shares before. But I've been burned more often than not, with dud investments like Slater & Gordon Ltd (ASX: SGH), Tattooed Chef Inc (NASDAQ: TTCF), Dusk Group Ltd (ASX: DSK) and Pinterest Inc (NYSE: PINS).
But that doesn't mean I don't invest in growth shares. I do. I just do so using exchange-traded funds (ETFs). You can too. So today, I'm going to discuss two growth-based ETFs that have worked wonders in my portfolio, and which I think would do nicely if you had $3,000 to invest in growth shares today.
An ASX investment strategy for ultimate growth
First up, let's talk about the VanEck Morningstar Wide Moat ETF (ASX: MOAT). This ETF isn't your typical index fund. It invests in a portfolio of US shares that indicate that they possess an economic moat of sorts. A moat is a term originally used by legendary investor Warren Buffett. It refers to a competitive advantage that a company can possess that protects it from competition.
This might be a powerful and trusted brand, a product that customers can't turn away from, or else a patent that can't be legally copied.
Often, these ETF holdings might not seem like typical growth names. For example, some of its current shares include Nike, Disney and Pfizer.
However, when the rubber hits the road, this ETF shines. As of 30 November, it has averaged an average performance of 15.01% per annum over the past five years. That's a number that should draw the eye of any growth investor.
The best tech stocks in the world
Another ASX ETF I use to gain exposure to growth shares is the BetaShares NASDAQ 100 ETF (ASX: NDQ). Along with the NYSE, the Nasdaq is one of the two major stock exchanges over in the United States. It is known for housing most of the American tech stocks we know and love. It's for this reason that this index fund is one of my major growth investments.
Amongst this ETF's top holdings, you'll find the likes of Amazon, Apple, Microsoft, Tesla, and Alphabet. All of these companies have delivered phenomenal returns to investors over the past decade. But you'll also find up-and-coming innovators like PayPal, Airbnb, Netflix, Starbucks, MercadoLibre and LuluLemon.
This fund has done even better than the Wide Moat ETF over the past five years. It has averaged a performance of 18.62% per annum over the last five years, and almost 28% over the past 12 months alone.
I've actually opted for the BetaShares Nasdaq 100 ETF – Currency Hedged (ASX: HNDQ), a currency-hedged version. This is due to the current Aussie dollar exchange rates. But I'll probably switch over to the unhedged iteration when the currency outlook is better.