Adding ASX growth shares to one's stock portfolio is a tempting prospect. After all, most of us want to see the highest possible returns from our share market investments. And growth shares, by their very name, typically offer the best prospects for high-return investments.
However, ASX growth shares also present some unique difficulties. For one, it can be far harder to put an accurate valuation on a company if it is projected to be far larger in the future than it is at the present. For another, growth shares can be more exposed to external economic factors, such as interest rates or a recession.
It's for these reasons that some Australian investors might be better off choosing an ASX exchange-traded fund (ETF) or two for their portfolios in lieu of picking individual growth shares themselves. With that in mind, here are two such ASX ETFs that I think offer investors a more diversified exposure to growth shares today.
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Looking for ASX growth shares? Try these two ETFs
BetaShares S&P/ASX Australian Technology ETF (ASX: ATEC)
First up, we have the BetaShares Australian Technology ETF. This fund offers investors an underlying portfolio of the largest 40 or so ASX tech stocks. Most of these companies can also be described as growth shares, thanks to their future potential.
ATEC tracks the S&P/ASX All Technology Index, which weights its tech stocks according to market capitalisation. This means that, similar to a broad-market index fund, the fastest-growing companies rise to the top of the index, and thus, this ETF's portfolio.
You'll find growth stocks ranging from WiseTech Global Ltd (ASX: WTC) and Xero Ltd (ASX: XRO) to REA Group Ltd (ASX: REA) and Life360 Inc (ASX: 360) in this portfolio.
If you're an investor who wants some exposure to ASX growth shares in your portfolio but has difficulty identifying the best opportunities, this fund is a great option, in my view.
BetaShares Nasdaq 100 ETF (ASX: NDQ)
Another Betashares ETF, this fund is a different option for ASX investors looking to buy growth shares.
Unlike ATEC, the Betashares Nasdaq 100 ETF invests in US stocks rather than ASX shares. It is an index fund that follows the 100 largest non-financial shares listed on the American Nasdaq stock exchange.
The Nasdaq is the exchange known for housing some of America's most famous growth shares. Its largest holdings are the 'Magnificent Seven', which is made up of Apple, Microsoft, Amazon, Tesla, NVIDIA, Meta Platforms, and Alphabet.
However, ASX investors will also gain access to other growth stocks, such as Netflix, PayPal, Costco, and Palantir Technologies.
The US is home to the best growth stocks in the world. As such, I think it's also a great place to start if you want to add some growth share exposure to an ASX portfolio today.
