A storied chapter in the history of one of the world’s best-performing growth funds may soon be ending.
After more than three decades managing Fidelity Contrafund (ticker: FCNTX), longtime portfolio manager William Danoff is reportedly preparing to step down within the year.
In anticipation of this, Fidelity added two co-managers to the fund in April 2025, but Danoff’s looming departure has raised questions about succession. His long tenure and exceptional track record have made him closely associated with FCNTX’s success.
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Despite the name suggesting a contrarian approach, FCNTX under Danoff has effectively operated as a flexible “go anywhere” growth strategy. The portfolio has consistently managed to pick prevailing market winners, particularly mega-cap technology companies.
“For actively managed growth funds, a prospective investor should first look at the fund objective and description to understand if this fund is appropriate for their investing style and risk tolerance,” says Geoff Strotman, senior vice president at Segal Marco Advisors. “They should also understand the track record and experience of the firm and team managing the fund.”
That positioning is visible today, with the fund’s top 10 holdings accounting for roughly half of assets and its highest-conviction position, Meta Platforms Inc. (META), representing about 12.7% of the portfolio.
The results have been strong. Over the past decade, Fidelity reports that FCNTX delivered a 17.8% annualized return before taxes with distributions reinvested. That compares with 15.5% for the S&P 500 index and 15.8% for the Morningstar large-cap growth category average over the same period.
The outperformance is notable given that FCNTX is actively managed and carries a relatively high expense ratio of 0.74%, which creates an ongoing drag on returns.
With Danoff preparing to step aside, some longtime shareholders may reconsider their position in the fund, and the possibility of outflows cannot be ruled out.
But FCNTX is far from the only option for investors seeking growth exposure. Asset managers such as Vanguard, Charles Schwab and BlackRock offer competing strategies, and many growth funds are now available in a more tax-efficient exchange-traded fund (ETF) format.
Here are seven of the best growth funds to buy and hold in 2026:
| Fund | Expense ratio |
| Fidelity Blue Chip Growth Fund (FBGRX) | 0.61% |
| Fidelity Magellan Fund (FMAGX) | 0.56% |
| Vanguard Growth ETF (VUG) | 0.03% |
| iShares Russell 1000 Growth ETF (IWF) | 0.18% |
| Invesco Nasdaq 100 ETF (QQQM) | 0.15% |
| Invesco S&P 500 GARP ETF (SPGP) | 0.36% |
| Invesco S&P 500 Pure Growth ETF (RPG) | 0.35% |
Fidelity Blue Chip Growth Fund (FBGRX)
FBGRX dates back to December 1987. The fund is a frequent fixture in workplace 401(k) menus, where it often serves as a higher-fee alternative to passive index funds. Since 2009, the strategy has been led by portfolio manager Sonu Kalra, who focuses on companies with above-average earnings growth potential paired with durable business models. Under his leadership, the fund has leaned heavily into tech stocks.
Kalra’s stock-picking approach emphasizes opportunities where the market may have mispriced either the rate or durability of a company’s growth. He places particular emphasis on catalysts that could trigger a rapid repricing of a stock as the broader market reassesses its outlook. Finally, Kalra also looks for companies with competitive advantages, pricing power and strong management teams.
Fidelity Magellan Fund (FMAGX)
FMAGX today looks very different from its famous run under Peter Lynch. After Lynch departed, several subsequent managers struggled to match his results, and critics at times accused the fund of “closet indexing,” meaning it held portfolios that closely resembled the benchmark while still charging active management fees. That dynamic contributed to a prolonged period of underperformance.
FMAGX today operates as a highly opportunistic actively managed strategy. Its broad mandate allows current portfolio manager Sammy Simnegar to invest across both domestic and international equities and across multiple market capitalizations. Simnegar often refers to the “three Bs” in his investment process: strong brands, barriers to entry and best-in-class management teams.
Vanguard Growth ETF (VUG)
“Since some growth stocks typically do not generate positive earnings until later in their business stage, metrics such as price-to-earnings, dividend yield and earnings yield tend to be less relevant,” says Mark Andraos, partner and wealth advisor at Regency Wealth Management. Instead, growth investors focus on measures such as revenue growth, earnings growth expectations and return on equity.
VUG’s composition offers useful insight into these dynamics. The ETF tracks the CRSP US Large Cap Growth Index. Vanguard reports that the ETF’s portfolio had an average earnings growth rate of 31.4% and a return on equity of 37.1% as of Jan. 31. However, elevated valuations remain a risk for new investors, with VUG trading at roughly 37.6 times earnings and 12.1 times book value.
iShares Russell 1000 Growth ETF (IWF)
“Growth stocks have benefited greatly from a decade of near-zero interest rates, as they were able to issue debt at low rates to help fund their operations,” Andraos says. Lower rates reduce the discount rate used in valuation models, which increases the present value of future cash flows. This benefits growth companies because a larger share of their value comes from profits expected many years in the future.
Another popular growth ETF to consider is IWF, which has $117 billion in assets and tracks the Russell 1000 Growth Index. IWF is more expensive than VUG, with a 0.18% expense ratio versus 0.03%, but the two ETFs share similar holdings and performance histories. Because they track different benchmarks, investors may find it useful to hold IWF as a tax-loss harvesting partner for VUG.
[READ: 7 Best Long-Term ETFs to Buy and Hold]
Invesco Nasdaq 100 ETF (QQQM)
“QQQM provides access to the 100 largest non-financial companies listed on the Nasdaq exchange,” says Nick Kalivas, head of factor and core equity product ETF strategy at Invesco. While the Nasdaq-100 was not originally envisioned as a growth-oriented benchmark, the exchange’s role in attracting innovative technology firms during the dot-com bubble shaped the index’s character, and persists today.
Investors may notice that more than one Nasdaq-100 ETF exists. QQQM’s larger and older counterpart is the Invesco QQQ Trust (QQQ), which is widely used by active traders thanks to its high trading volume, tight spreads and deep options market with daily expiries. However, QQQM is the lower-cost version designed more for long-term investors. The fund carries a cheaper 0.15% expense ratio.
Invesco S&P 500 GARP ETF (SPGP)
“SPGP offers a differentiated return and risk profile from traditional growth funds, which are agnostic to a company’s quality characteristics and avoid focusing on valuation measures,” Kalivas explains. The strategy follows a growth at a reasonable price, or GARP, philosophy that attempts to capture companies with strong growth prospects without ignoring valuation or balance sheet strength.
SPGP’s benchmark begins with the S&P 500, ensuring a baseline level of company size, liquidity and earnings consistency. From there, the methodology applies a statistical framework that evaluates companies using a growth score alongside composite quality and value scores. The 75 highest-scoring securities are then selected for inclusion in the portfolio. SPGP charges a 0.36% expense ratio.
Invesco S&P 500 Pure Growth ETF (RPG)
A common criticism of the first-generation S&P 500 growth and value indexes was that their selection criteria were too broad. As a result, the portfolios often overlapped significantly, with many companies appearing in both the value and growth versions of the index. The second generation of “pure” style indexes was designed to solve this problem by creating more concentrated portfolios.
The S&P 500 Pure Growth Index tracked by RPG assesses three-year sales-per-share growth, earnings-per-share change relative to share price and 12-month share price momentum. Only companies that rank as “deep growth” are included. “The stocks in RPG are also weighted by their growth score, so that the companies with the highest growth score receive the largest weight,” Kalivas says.
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7 of the Best Growth Funds to Buy and Hold originally appeared on usnews.com
Update 03/11/26: This story was published at an earlier date and has been updated with new information.
