Lean into growth, but diversify. That was an interesting midyear market call I heard this week, and one that rang slightly surprising — and, yet, not surprising at all.

Key Takeaways:

• Growth appetite remains resilient amid market broadening, with growth ETFs taking 30% more money than value.
• Quality and valuation can act as risk buffers as Q2 earnings remain in focus.
• Three ETFs — VFLO, QGRO, and RANK — provide examples of unique frameworks to lean into growth while diversifying risk.

We’re diving deeper into earnings season, with key growth darlings’ Q2 results coming up next. It makes sense to lean into growth thoughtfully, diversifying selectively. Why? Growth has run up a lot in recent years. But many of the key drivers of growth’s upward momentum remain in place, even if performance has moderated this year.

When we look back three years, growth ETFs have persistently and significantly outperformed value ETFs (as measured by IVW vs. IVE). The Magnificent Seven, the technology sector and the AI theme have largely driven that performance.

Growth’s resilient track record in recent years has also been noteworthy relative to the S&P 500 (as measured by SPYM), except for this year:

Growth — where AI hyperscalers and mega-cap tech names sit prominently among other companies — has been increasingly called to “show the money” — aka results — stemming from the massive ongoing AI capex. There’s concern about stretched valuations and market concentration on these names. And there are the expectations that earnings growth will be more robust going forward outside of the Magnificent Seven, as the “493” catch-up in months ahead. The ongoing earnings season has already been confirming that broadening is indeed happening.

Three “Growth” ETFs Worth Investigating

Comparing ETF asset flows into the 10 largest growth ETFs vs. the 10 largest value ETFs in 2026 shows that value may stage a comeback this year. But investor appetite for growth remains resilient. The top 10 growth ETFs are picking up about 30% more assets than their value counterparts.

Given market conditions, earnings concerns, and a call to lean in but diversify, perhaps quality-focused, valuation-aware growth is a compelling path.

Consider three very different ETFs as examples of that type of exposure: the Victory Shares Free Cash Flow ETF (VFLO), the American Century U.S. Quality Growth ETF (QGRO), and the Defiance KSM TipRanks Analyst ETF (RANK).

QGRO is categorized as a growth fund. Neither VFLO nor RANK are, yet growth is a key component of their portfolios.

Under the Hood

VFLO focuses on companies that both generate high free cash flow yields and are projected to grow cash flows. By design, the fund filters out low-quality, debt-burdened, or unprofitable companies. The strategy makes sure you aren’t overpaying for revenue growth that may not translate to the bottom line. The approach means a “growth” portfolio that’s value-aware, focused on high profitability and fundamentally strong.

QGRO’s systematic strategy considers both high-growth names seeing top-line expansion and stable-growth names with more consistent ROE and steady balance sheets. The quality focus, valuation-aware approach mitigates from the risks tied to speculative growth and market drawdowns.

RANK combines the virtues of fundamental strength via analyst research with technical price momentum trends. This formula results in a portfolio that owns some tech names driving economic growth. It offers exposure that captures market momentum coupled with consensus earnings confidence.

Participation With Less Heartburn

If you want to lean into growth while diversifying your equity exposure, these ETFs are unique paths you can take. Now let’s see what the next round of earnings results tell us about this opportunity set.

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VettaFi LLC (“VettaFi”) is the index provider for VFLO, QGRO, and RANK, for which it receives an index licensing fee. However, VFLO, QGRO, and RANK are not issued, sponsored, endorsed, or sold by VettaFi, and VettaFi has no obligation or liability in connection with the issuance, administration, marketing, or trading of VFLO, QGRO, or RANK.