Bank of America’s 8 Fastest-Growing ETFs by 2025

Bank of America recently turned bullish on large-cap growth ETFs in its latest outlook for 2025. It changed the ratings of more than a dozen funds, including starting coverage of 14 growth ETFs and updating the ratings of five others. In total, a total of 8 ETFs earned the highest rating.

The upgrade comes at a time when tech, mega-cap and AI stocks have dominated the market since 2023. Concentration at the top of the S&P 500 is reaching record highs and the Magnificent 7 continues to drive S&P 500 gains. Despite high valuations, Bank of America sees improving balance sheet quality and revenue growth they could maintain the rebound.

• Invesco QQQ ETF (QQQ)

• Vanguard Growth ETF (VUG)

• iShares Russell 1000 Growth ETF (IWF)

• iShares S&P 500 Growth ETF (IVW)

• Invesco Nasdaq 100 ETF (QQQM)

It also comes at a time when markets are weighing additional risks, including a government shutdown, weaker labor market and employment data and possible fatigue after three years of nearly uninterrupted gains in the S&P 500.

Large-cap growth ETFs such as VUG and SCHG have captured massive inflows as investors chase AI-driven earnings momentum.Shutterstock

Bank of America, however, notes:

“We upgrade our category view of US large-cap growth ETFs from Neutral to Favorable,” the bank wrote, citing “continued outperformance versus other factors, strong capital inflows and a mature product set.”

While diversification remains key in the long term, the report suggests that growth stocks and growth ETFs are likely to drive performance in modern portfolios.

• Bank of America raises its opinion on US large-cap growth ETFs to “Favourable.”

• Eight ETFs earned the bank’s highest rating.

• Concentration on the S&P 500 and high valuations are key risks.

Related: Forget VOO, SPY, VTI: The Best Stock Investment Option Is This Fidelity Fund

In its model, Bank of America assigns two values ​​to an ETF:

View of specific funds

• 1 = most attractive

• 2 = attractive

• 3 = less attractive

Category Outlook

• FV = favorable

• NV = neutral

• UF = unfavorable

Scores are derived from a number of factors, including ROA, ROE, valuation, earnings growth and expense ratios.

The best ETFs would get a “1-FV” rating, while the worst would get a “3-UF” rating.

More ETFs

In its report, Bank of America gave the highest “1-FV” rating to 8 large-cap growth ETFs.

• T. Rowe Price Prime Growth ETF (TCHP)

• T. Rowe Price Growth Stock ETF (TGRW)

• Schwab US Large Cap Growth ETF (SCHG)

• iShares Morningstar Growth ETF (ILCG)

• Vanguard Mega Cap Growth ETF (MGK)

• Fidelity Blue Chip Growth ETF (FCCG)

• Vanguard Growth ETF (VUG)

• Harbor Long Term Producers ETF (WINN)

Of this group of eight, SCHG maintained its rating, VUG improved and the remaining six started with this rating.

The full list of 19 ETFs can be seen here:

source: Bank of America

Not all ETFs received a good rating from Bank of America. The group as a whole received a “Favourable” rating, but four ETFs received a “Least Attractive” rating.

• Capital Group Growth ETF (CGGR)

• First Trust Large Cap Growth AlphaDEX ETF (FTC)

• Invesco S&P 500 Pure Growth ETF (RPG)

• Pacer Trendpilot 100 ETF (PTNQ)

These ETFs scored lower on valuations, momentum, or balance sheet health.

Even in its upgrade of the large-cap growth ETF sector, Bank of America flagged several risks facing the S&P 500 and the U.S. stock market as a whole.

• Top 10 stocks now account for 40% of S&P 500, highest level in history: The last few years have led to a historically high concentration of mega-cap growth and technology stocks at the top of the S&P 500 and Nasdaq 100. Those types of concentration bubbles tend to uncoil eventually, as they did during the tech bubble.

• The S&P 500 trades at 31x earningsdouble the S&P 500 average: Historically high valuations for U.S. stocks, but especially growth stocks, could shrink quickly in an economic downturn. However, overall improvement in balance sheet quality could help justify some of the current valuations.

• S&P 500 Value Stocks Trade at Just 23 Times Earnings: After a boom in tech/AI profits, profit growth could begin to spread across the economy. This could give value and non-tech stocks a boost going forward.

• Bank of America upgrades its outlook for the U.S. large-cap growth ETF sector to “Favourable.”

• Eight growth ETFs received the bank’s highest rating.

• High concentration of the index and valuations are potential risks.

• Value stocks could outperform if earnings growth extends.

Despite years of strong earnings and outperformance, Bank of America still likes growth stocks and large-cap ETFs.

However, not all large-cap growth ETFs are created equal and this report emphasizes the need for research and selectivity when choosing the best ETFs.

Choosing the best ETF could make the difference in who outperforms and who falls behind.

This story was originally published by TheStreet on October 10, 2025, where it first appeared in the Investment News and Strategies section. Add TheStreet as a preferred source by clicking here.