Better Vanguard ETF Buy: MGK vs. VOOG

MGK holds fewer, more concentrated mega-cap growth stocks and has a slightly deeper five-year drawdown than VOOG.

Both ETFs charge the same low expense ratio, but MGK has a marginally lower dividend yield.

VOOG offers broader sector exposure with more holdings, while MGK is more heavily tilted toward technology.

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The Vanguard S&P 500 Growth ETF (NYSEMKT:VOOG) and the Vanguard Mega Cap Growth ETF (NYSEMKT:MGK) both target U.S. growth stocks, but they take distinct approaches.

While VOOG tracks the growth slice of the S&P 500, offering broad exposure to large-cap growth, MGK zeroes in on the largest growth companies using a more concentrated mega-cap focus. Here’s how the two stack up on performance, risk, and diversification.

Beta measures price volatility relative to the S&P 500. The 1-yr return represents total return over the trailing 12 months.

Both ETFs come with the same low expense ratio, but MGK pays a slightly lower dividend yield. While there’s no difference for investors focused on fees, those seeking even a modest income tilt may find VOOG marginally more attractive.

MGK is built for investors seeking focused exposure to U.S. mega-cap growth stocks, tracking the largest companies with a portfolio of just 60 stocks.

Technology dominates, making up 55% of the fund, followed by communication services and consumer cyclical. Its top holdings — Nvidia, Apple, and Microsoft — collectively make up more than 35% of the fund.

By contrast, VOOG spreads its bets across 140 growth-oriented stocks, with technology making up 49% of total assets. Its secondary sectors include communication services and consumer cyclical.

Its top three positions match MGK’s but are somewhat less concentrated, making up around 32% of the portfolio. This broader sector and stock exposure may appeal to those seeking slightly more diversification within the U.S. growth universe.

For more guidance on ETF investing, check out the full guide at this link.

VOOG and MGK both focus on growth stocks, but they offer differ approaches to this segment of the market.

VOOG only includes stocks from companies included in the S&P 500. That can add an element of stability to this investment, as this index is made up of the largest and strongest U.S. companies. With more than double the number of holdings of MGK, it also boasts greater diversification.

MGK, on the other hand, is devoted solely to mega-cap growth stocks. Mega-cap stocks are generally defined as having a market cap of at least $200 billion, compared to the $10 billion cutoff for large-cap stocks.

Between the two funds, MGK has experienced more significant volatility in recent years with a higher beta and deeper max drawdown. While VOOG comes out ahead in 12-month total returns, MGK has performed slightly better over the last five years.

Both ETFs can be fantastic choices for growth-focused investors, but the right one will depend on what you’re looking to achieve. VOOG offers a wider variety of stocks, including both large- and mega-cap stocks. MGK’s narrower approach can lead to less diversification and greater volatility, but it could also boast higher total returns over time.

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Katie Brockman has positions in Vanguard Admiral Funds – Vanguard S&P 500 Growth ETF. The Motley Fool has positions in and recommends Apple, Microsoft, and Nvidia. The Motley Fool recommends the following options: long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft. The Motley Fool has a disclosure policy.

Better Vanguard ETF Buy: MGK vs. VOOG was originally published by The Motley Fool