A great growth stock and an ETF to consider in October!

Looking for a growth stock or two to add to a portfolio? Royston Wild picks out a growth share and a fresh new ETF for savvy investors to consider.

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Investing in growth stocks can be a good idea as they offer the potential for significant capital appreciation. Over time, their share prices can experience spectacular growth as earnings shoot through the roof.

These shares also come with a higher level of risk and chance for volatility, however. So investors need to take care when choosing what to buy.

With this in mind, here are two investments I think are worth serious consideration this October.

Should you invest £1,000 in Nvidia right now?

When investing expert Mark Rogers has a stock tip, it can pay to listen. After all, the flagship Motley Fool Share Advisor newsletter he has run for nearly a decade has provided thousands of paying members with top stock recommendations from the UK and US markets. And right now, Mark thinks there are 6 standout stocks that investors should consider buying. Want to see if Nvidia made the list?

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TBC Bank Group

Created with Highcharts 11.4.3TBC Bank PriceZoom1M3M6MYTD1Y5Y10YALLwww.fool.co.uk

Investors have an array of banking shares to choose from. But I’d steer away from UK high street operators such as Lloyds and NatWest given the mediocre outlook for the British economy.

Instead, I’d spend my money on TBC Bank Group (LSE:TBCG). Earnings here have soared thanks to strong economic growth in Georgia, its core territory. Between 2018 and 2023, the company’s gross loan portfolio grew at an annual rate of 15% as financial services demand expanded.

Encouragingly, Georgia’s economic boom is tipped to carry on, too. The World Bank estimates GDP growth of 5.2% in 2024. And it predicts expansion to remain around 5% for the following two years.

By comparison, the World Bank thinks Britain’s economic growth will come in closer to 1% over the period.

Reflecting these forecasts, City analysts think TBC Bank will rise 10% this year before accelerating to 20% in 2025.

Mounting political instability in the country poses a potential threat to future earnings. But I think this is baked into the bank’s ultra-low valuation. It trades on a forward price-to-earnings (P/E) ratio of just 4.6 times.

In fact, with TBC Bank also carrying a huge 7.6% dividend yield, I think it has significant appeal as an income stock as well as a growth share.

Vanguard Growth ETF

Created with Highcharts 11.4.3Wisdomtree Us Quality Growth Ucits Etf PriceZoom1M3M6MYTD1Y5Y10YALLwww.fool.co.uk

Investing in individual shares carries higher risk than spreading cash across a multitude of companies. It’s why we at The Motley Fool recommend building a portfolio of different companies.

However, individuals can also do this easily (and more cheaply) by buying an exchange-traded fund (ETF). These are financial instruments that hold a basket of stocks or other assets.

I have holdings in several ETFs. And I’m considering adding the WisdomTree US Quality Growth ETF (LSE:QGRP), which was founded earlier this year, to my portfolio.

The fund currently holds 100 stocks including US tech giants Microsoft, Nvidia and Apple. Indeed, technology features heavily in its makeup, giving investors exposure to hot growth opportunities like artificial intelligence (AI), autonomous vehicles, and quantum computing.

The composition of the WisdomTree ETF.
Source: WisdomTree

While ETFs help reduce risk, they aren’t (like any investment) completely free of peril. In the case of this WisdomTree product, the average P/E ratio of the stocks its holds is a huge 37.7 times.

The problem is that high valuations like this leave a stock or fund at risk of a price collapse if investing confidence declines.

Having said that, elevated valuations are common among growth stocks. And, on balance, I think the fund could be an excellent addition to my portfolio.

Should you buy Nvidia shares today?

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Of course, the decade ahead looks hazardous. What with inflation recently hitting 40-year highs, a ‘cost of living crisis’ and threat of a new Cold War, knowing where to invest has never been trickier.

And yet, despite the UK stock market recently hitting a new all-time high, Mark and his team think many shares still trade at a substantial discount, offering savvy investors plenty of potential opportunities to strike.

That’s why now could be an ideal time to secure this valuable investment research.

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Should you invest, the value of your investment may rise or fall and your capital is at risk. Before investing, your individual circumstances should be assessed. Consider taking independent financial advice.

Royston Wild has no position in any of the shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

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