Growth stocks are soaring these days as investors feel more optimistic about the economy moving forward and place bets on companies that generally excel in these sorts of environments. On top of that, companies focusing on the newish high-growth area of artificial intelligence (AI) are also attracting investors' attention.

But with all the growth stocks out there, it may seem intimidating to select just the right ones to boost your portfolio -- or even potentially make you a millionaire -- over time. Don't worry, though. There's an easier way to bet on growth stocks and win, and that's by investing in an exchange-traded fund (ETF).

The Vanguard Mega Cap Growth ETF (NYSEMKT: MGK) is a good example. It offers exposure to many of today's top growth stocks -- so you'll get a lot of bang for your buck. But could an investment in this ETF, like an investment in just the right hand-picked selection of growth stocks, make you a millionaire? Let's find out.

Trading like a stock

First, a bit of background on ETFs. These assets trade daily, just like stocks, so you can buy them as you would a stock. They offer you a variety of themes, from industry to investment style. With just one purchase, you can gain exposure to many companies within that theme. Here, as mentioned, we'll focus on mega-cap growth stocks.

One thing to keep in mind before buying an ETF is that they do come with fees; this is noted on the description page on the management company's website and in fund literature. It's called the expense ratio, and it's best to choose an ETF with one that's less than 1%. This way, the fee won't eat significantly into your returns over time.

The Vanguard Mega Cap Growth ETF's expense ratio is 0.07%, so it easily fits our criteria. Now, let's consider the composition of this particular asset. It's designed to mimic the performance of the CRSP US Mega Cap Growth Index, weighting each stock as it is weighted in the index.

The Vanguard ETF includes 71 stocks, and their average annual earnings growth rate over the past five years is more than 22%. Technology stocks are weighted more than 62% in the fund, and consumer discretionary shares carry the second-biggest weighting at more than 18%. But the rest of the fund includes a wide variety of industries, from healthcare to telecommunications. So, by investing in this ETF, you are diversifying your portfolio.

Vanguard Mega Cap Growth's top holdings

The ETF's top holdings include Microsoft, Apple, and Nvidia, each with a weighting of more than 11%. But the 10 biggest positions also include a few non-tech players, such as pharmaceutical giant Eli Lilly and payment card powerhouse Visa.

This recipe changes according to the composition of the CRSP US Mega Cap Growth Index and the growth leaders of the times. For example, in the future, if another industry beats tech when it comes to growth and the index favors it, the ETF will follow. The Vanguard ETF has shown its strengths over both the near and long terms, climbing 21% this year so far and 135% over the past five years.

Is this ETF a millionaire-maker?

Let's return to our question and consider whether this investment could be a millionaire-maker. We'll use a past scenario as an example. Imagine you invested $100,000 in the Vanguard ETF 10 years ago. Today, your investment would be worth over $446,000. That's a fantastic return, but it required a huge initial investment -- and still didn't bring you to the $1 million mark. And it's risky to invest your money in just one asset, even if that asset includes many stocks.

All of this suggests that it's unlikely an investment in this ETF alone will make you a millionaire. However, the Vanguard ETF still could help you become a millionaire if you include it in a diversified portfolio. For example, a great technique would be to invest in this ETF and an ETF that tracks the S&P 500 -- to capture a wider variety of stocks -- and then add in some of your own stock picks. Over the long run, this strategy may add to your wealth -- and potentially even bring you to your goal of a $1 million portfolio.

Should you invest $1,000 in Vanguard World Fund - Vanguard Mega Cap Growth ETF right now?

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Adria Cimino has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Apple, Microsoft, Nvidia, and Visa. The Motley Fool recommends the following options: long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft. The Motley Fool has a disclosure policy.

Is the Vanguard Mega Cap Growth ETF a Millionaire-Maker? was originally published by The Motley Fool