By definition, a good ASX growth stock should be growing revenues and earnings at a fast clip, and preferably show an ability to outperform the broader ASX stock market over meaningful periods of time. Which it should, if it is indeed expanding its business at a rapid and consistent clip.
There are many ASX growth stocks that fulfil these requirements on the ASX. But today, let's talk about an ASX exchange-traded fund (ETF) that represents an investment in several of them.
The BetaShares S&P/ASX Australian Technology ETF (ASX: ATEC) is a fund that aims to, and mostly succeeds in, capturing most of the ASX's fastest-growing technology stocks.
As most growth investors would know, it's difficult (though not impossible) to find a compelling ASX growth stock that is outside the tech space in this day and age.
ATEC invests in many ASX growth stocks. But let's go through them. At present, the largest five holdings of this ASX ETF are as follows:
- Computershare Ltd (ASX: CPU)
- Xero Ltd (ASX: XRO)
- Pro Medicus Ltd (ASX: PME)
- Car Group Ltd (ASX: CAR)
- WiseTech Global Ltd (ASX: WTC)
Some other high-flying names you might recognise are Life360 Inc (ASX: 360), TechnologyOne Ltd (ASX: TNE), and REA Group Ltd (ASX: REA).
Most of these names have been stunning performers in recent years. Which leads us to performance.
Image source: Getty Images
Has this ASX growth stock really returned 25% per annum?
As you might have gathered from the headline, this ASX ETF has been an investment that many would wish were already in their portfolios. As of 31 October, ATEC units have delivered a return of 13.28%. However, things get more impressive if we zoom out a little. Over the three years to 31 October, this fund has indeed returned an average of 24.74% per annum.
This ETF has only been around since March 2020. However, the index that it tracks – the S&P/ASX All Technology Index (ASX: XTX) – has returned 15.95% per annum over the past ten years.
Naturally, it's worth pointing out that past performance is never a guarantee or indicator of future returns. Even so, that's one impressive track record. As such, this ASX growth stock may be a suitable addition for those seeking to diversify their portfolios with some growth exposure through some of the ASX's most successful stocks of recent years.
The Betashares Australian Technology ETF charges a not-insignificant management fee of 0.48% per annum, which is worth keeping in mind.
