3 ETFs Worth the Wait if a Stock Market Crash Hits

The S&P 500's Shiller CAPE ratio recently reached 41.6, approaching its all-time high of 44.2 set at the peak of the dot-com bubble in 2000, the Motley Fool observed. A correction may not arrive in 2026, but the valuation environment means growth-heavy ETFs could offer exceptional buying opportunities when one does.

The SPDR Portfolio S&P 500 Growth ETF (NYSEMKT:SPYG), the iShares Semiconductor ETF (NASDAQ:SOXX), and the Schwab U.S. Large-Cap Growth ETF (NYSEMKT:SCHG) in particular fall hardest during selloffs but have historically recovered the fastest. Assessing where you stand financially before a crash arrives gives you the clarity to act when others freeze, because the best buying windows tend to close quickly.

SPDR Portfolio S&P 500 Growth ETF focuses on the 140 fastest-growing S&P 500 stocks

SPYG holds roughly 140 of the fastest-growing companies in the S&P 500 at an expense ratio of 0.04%, with approximately 60% of assets concentrated in its top 10 holdings, Morningstar data via the Motley Fool showed. The concentration means SPYG drops faster than the broader index in a selloff, but the same concentration in the market's strongest growers is why it tends to snap back more aggressively.

The fund's top names include Nvidia, Apple, and Microsoft, and its sector weighting tilts heavily toward information technology. In a crash scenario, these stocks often fall 30% to 40% before rebounding within 12 to 18 months, and buying SPYG at depressed levels gives you the rebound of all 140 names in a single trade rather than trying to pick individual winners under pressure.

iShares Semiconductor ETF has averaged roughly 33% annual returns over 10 years

SOXX holds approximately 30 semiconductor stocks and has produced strong long-term total returns. Key performance figures include the following.

• 10-year total return of approximately 1,598%, translating to a compound annual growth rate near 33%.
• 5-year total return CAGR of roughly 33% through mid-2026.
• A 35% drawdown in 2022 as the semiconductor cycle corrected sharply.
• Year-to-date return of roughly 88% through late September 2026.

The 2022 drawdown is the key data point for a crash-buying thesis. SOXX dropped 35% and then more than tripled from its low, QuantFlowLab's review documented. The fund carries a beta of 1.77, meaning it amplifies both gains and losses relative to the broader market, a dynamic that makes it unsuitable for conservative portfolios but powerful for investors with a long enough timeline and the discipline to buy during fear.

Schwab U.S. Large-Cap Growth ETF has averaged 18.7% annually over 10 years

SCHG tracks the Dow Jones U.S. Large-Cap Growth Total Stock Market Index and holds approximately 196 stocks at an expense ratio of just 0.04%, the Motley Fool detailed. The fund's 10-year average annual return of 18.7% has outpaced the Morningstar large-cap growth category average of 15.9%, demonstrating consistent outperformance across multiple market cycles.

Nvidia, Apple, and Microsoft together account for nearly 32% of the fund, with technology stocks making up roughly 45% of total assets. SCHG provides broader diversification than SOXX's 30-stock semiconductor portfolio while still tilting aggressively toward growth, making it a middle ground for investors who want crash-buying upside without single-sector concentration.

The Shiller CAPE ratio of 41.6 is approaching its dot-com peak of 44.2

The cyclically adjusted price-to-earnings ratio for the S&P 500 recently stood at 41.6, just 6% below the all-time high of 44.2 recorded at the March 2000 Nasdaq peak, the Motley Fool flagged. The ratio has been rising steadily, suggesting that a correction or crash in 2026 or 2027 is plausible even if the timing remains uncertain.

The CAPE ratio does not predict when a crash will happen, but it does indicate that stocks are priced at levels where past selloffs have tended to originate. For your watchlist, the elevated ratio reinforces why growth funds like SPYG, SOXX, and SCHG belong on a crash-day buying list rather than in an aggressive accumulation plan at current prices.

FactSet projects 17% S&P 500 earnings growth through 2027

The recovery backdrop for a crash-buying strategy depends on whether corporate earnings hold up after a selloff, and FactSet's projection of 17% S&P 500 earnings growth through 2027 suggests the underlying profit engine remains strong. Earnings growth provides the fuel for stock price recovery, and a decline driven by valuation compression rather than earnings collapse tends to resolve faster.

Crestmont Research data confirms the S&P 500 has never delivered a negative total return over any 20-year holding period since 1900. Shorter windows carry real risk, but for investors with at least a decade, the historical record suggests that buying growth funds during a crash has consistently rewarded patience.

Position sizing matters more than timing the exact bottom

A crash-day watchlist is only useful if you have capital ready to deploy and a position size that does not exceed your risk tolerance. SOXX's 1.77 beta means a 20% market decline could translate into a 35% drop in that fund alone, and adding SPYG and SCHG on top creates a growth-concentrated allocation that requires time to recover.

Spreading purchases across several days or weeks after an initial decline reduces the risk of buying too early, and matching the combined position size to a timeline of at least five to 10 years gives these funds room to deliver the kind of compounding their track records suggest. The goal is not to catch the exact bottom but to own proven growth vehicles at prices the market rarely offers.

Bottom line

SPYG, SOXX, and SCHG fall hardest during selloffs because their growth-focused mandates concentrate holdings in the stocks the market punishes most aggressively. SOXX's 35% drawdown in 2022 followed by a tripling from the low, its roughly 33% 10-year compound annual return, and SCHG's consistent outperformance of its category average all demonstrate that the recovery math favors funds with proven earnings power.

Having must-have investing apps loaded with a watchlist and cash set aside before a crash arrives is the difference between acting on the opportunity and reading about it afterward. The CAPE ratio near 41 does not guarantee a selloff, but it does mean the valuation reset these funds need to become exceptional buys is closer than it has been at almost any point in 25 years.

This article is for informational purposes only and should not be considered investment advice.

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