2 ETFs That Could Turn $1,000 Into $2,000 Quickly

ETFs like Purpose Ethereum Yield ETF (TSX:ETHY) could be excellent growth opportunities.

| More on:
exchange traded funds

Image source: Getty Images

Growth investing is particularly difficult right now. Tech and growth stocks have been beaten down in recent months. Meanwhile, the economic outlook for growth isn’t as rosy as it was last year. We’re at the end of a boom. 

Nevertheless, there’s still hope for growth in some sectors of the economy. In fact, I think some stocks and exchange-traded funds could double your investment relatively shortly. Here are two growth strategies I’m watching in 2022. 

Small-cap ETF

Tiny companies that are beyond the radar of most investors are severely undervalued. After two years of lockdowns, many of these smaller businesses are now bracing for a rebound in demand. Meanwhile, small oil and gas stocks or mining companies don’t attract the same valuations as their larger counterparts. 

This creates an opportunity for growth. The iShares S&P/TSX SmallCap Index ETF (TSX:XCS) is a top pick. The fund’s portfolio includes small-cap energy stocks like Baytex alongside tech companies like Celestica. These companies have much more room to grow when investors recognize the opportunity. 

In 2022, I expect the economic upswing to create a tailwind for small businesses across the country. This ETF should give investors easy access to that trend as it develops.

In fact, the XCS fund has delivered a 13.3% annual return over the past three years. At that pace, it could turn $1,000 into $2,000 within six years! For growth investors with an appetite for risk, this ETF could be a top pick. 

Ethereum Dividend ETF

The fact that cryptocurrencies deliver stunning gains is beyond a doubt. Bitcoin has doubled in value multiple times over the past two years. Ethereum, meanwhile, is up 2,500% since 2020. In other words, you could have put $1,000 into ETH and turned it into $25,000 within two years.

However, there’s a catch. Cryptocurrencies are also prone to severe drawdowns. All major cryptocurrencies have lost double-digit percentages of their market value in recent months. Sometimes, they can lose more than 10% in a single day. This is a volatile asset class.

Fortunately, there’s a new ETF that buffers the volatility a little. The Purpose Ethereum Yield ETF (TSX:ETHY) offers a double-digit dividend yield that offsets some of the downside risk. It generates this yield by writing covered call options on a portion of its Ether holdings. At the moment, ETHY offers a 17.4% dividend yield. That’s nearly half the recent decline in Ethereum’s value, which makes this ETF a safer bet than the underlying digital asset.

Put simply, this ETF could double your money in a matter of months during a boom. However, in a bust it can limit your losses with the premiums on covered calls. For aggressive growth investors, this is a top pick in 2022.

Bottom line

Hyper-growth opportunities are scarce. Investors seem too pessimistic about tech and growth stocks right now. But there are opportunities in some sectors. I believe small-cap businesses and cryptocurrencies are an ideal target for 2022. Keep an eye on these sectors. 

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.

Fool contributor Vishesh Raisinghani owns Bitcoin and Ethereum. The Motley Fool owns and recommends Bitcoin and Ethereum.

More on Investing

Growth from coins
Tech Stocks

2 Canadian Growth Stocks to Buy and 1 to Sell

The recent volatility in the stock market has created all kinds of opportunities for long-term investors.

Read more »

tsx today
Stock Market

TSX Today: What to Watch for in Stocks on Wednesday, February 21

The Federal Open Market Committee’s meeting minutes and more corporate results are likely to keep TSX stocks volatile today.

Read more »

Retirement
Investing

Got $5,000? Buy and Hold These 3 Value Stocks for Years

Given their solid underlying businesses, healthy growth prospects, and attractive valuation, I am bullish on these three value stocks.

Read more »

money cash dividends
Stocks for Beginners

Got $1,000 to Invest in Stocks? Put It in This Index Fund

This low-cost beginner-friendly ETF is a great way to invest $1,000.

Read more »

Overhead shot of young adults using technology at a table
Tech Stocks

3 Cheap Tech Stocks to Buy Right Now

Given their long-term growth prospects and discounted stock prices, I am bullish on these tech stocks.

Read more »

Gas pipelines
Dividend Stocks

TFSA Passive Income: Is Enbridge Stock a Buy, Sell, or Hold?

Enbridge now offers a yield near 8%. Is the dividend safe?

Read more »

money cash dividends
Dividend Stocks

Have $500? 2 Absurdly Cheap Stocks Long-Term Investors Should Buy Right Now

Want some absurdly cheap stocks for your portfolio? Here are two options trading at a huge discount right now.

Read more »

Redwood trees stretch up to the sunlight.
Tech Stocks

These 3 Magnificent Stocks Keep Driving Higher

Constellation Software, Dollarama and another TSX stock have consistently generated positive investment returns. Here’s why they belong in your retirement…

Read more »