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The Vanguard Mega Cap Growth ETF (MGK) and the Vanguard Growth ETF (VUG) both target U.S. large-cap growth, but they differ in how concentrated their portfolios are. MGK holds a narrower set of mega-cap stocks, while VUG provides broader exposure across growth companies.
Both funds are low-cost, with VUG charging less than MGK. VUG’s expense ratio is 0.03% versus 0.05% for MGK. The funds also vary significantly in scale: VUG has $317.9 billion in assets under management (AUM), compared with $27.9 billion for MGK.
On volatility, beta is similar for both funds relative to the S&P 500, with VUG at 1.18 and MGK at 1.17. Over the trailing 12 months, MGK’s total return is slightly higher, while VUG offers a slightly higher dividend yield.
Over the past five years, both ETFs experienced similar drawdowns and growth. MGK’s five-year max drawdown is -36.02% compared with -35.61% for VUG. Growth of $1,000 over five years (total return) was $1,957 for MGK and $1,882 for VUG.
MGK is more concentrated. It holds 59 positions and focuses on the largest growth stocks in the U.S. Its sector allocation is heavily weighted toward technology at 55% of assets, followed by communication services and consumer cyclical. The largest holdings include Nvidia, Apple, and Microsoft.
VUG is broader, holding 153 positions. Its sector profile is similar, with technology at 53% of assets, and communication services and consumer cyclical among the top sectors. Its top holdings are also Nvidia, Apple, and Microsoft.
Although both funds emphasize large-cap growth, MGK’s narrower mega-cap focus can matter for investors. MGK has fewer than half the holdings of VUG and concentrates on mega-cap companies, defined here as firms with market capitalization of at least $200 billion, compared with a $10 billion threshold for large-cap stocks.
Even with overlapping top sectors and holdings, MGK assigns greater weight to its largest names. Nvidia, Apple, and Microsoft account for 35.31% of MGK’s portfolio, versus 34.73% for VUG. The difference is modest, but it can influence results if those stocks perform differently going forward.
MGK has marginally outperformed VUG in five-year growth, aligning with the idea that strong performance in the technology-heavy growth segment has helped this more concentrated fund. Historically, however, the funds have shown nearly identical one-year total returns and very similar five-year max drawdowns.
For investors seeking broader diversification across large- and mega-cap growth, VUG may be preferable due to its wider holding base and lower expense ratio. Investors looking to focus specifically on the largest U.S. growth stocks may prefer MGK, accepting its more concentrated exposure.
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