Discover the Impressive Vanguard ETF That Has 59.3% of Its Portfolio in the “Magnificent Seven” Stocks

This Vanguard ETF has the potential to boost the returns of a diversified investment portfolio.

In 2023, a group of seven technology companies became known as “The Magnificent Seven” on Wall Street, given their remarkable performance, especially within the artificial intelligence (AI) sector. Their growth has been impressive.

Since the AI surge began earlier in 2023, these stocks have delivered a median return of 178%, while the S&P 500 only increased by 74% during that same timeframe.

This situation suggests that anyone not holding these influential stocks has likely seen lower returns than the market overall in recent years, but here’s the silver lining: there’s an easy way to invest in all of them.

The Vanguard Mega Cap Growth ETF ((MGK 1.03%)) focuses exclusively on America’s largest firms, with a notable 59.3% of its portfolio allocated to the Magnificent Seven.

Magnificent Seven with Added Diversity

The Vanguard Mega Cap Growth ETF tracks the CRSP US Mega Cap Growth Index, which represents 70% of the U.S. market capitalization. Essentially, if all 3,508 companies from the CRSP US Total Market Index were listed by size, this index would cover the top 70% of their value.

Currently, the ETF holds just 69 stocks, which indicates a significant concentration within the U.S. corporate sector. In this case, only 69 companies account for 70% of the total market value of all 3,508 listings. The remaining 3,439 firms represent the last 30%.

The total worth of the Magnificent Seven stocks amounts to about $20.7 trillion, which explains their significant presence in the Vanguard ETF.

Data originating from Vanguard specifies these portfolio weights as of August 31, 2025, and they could change.

Nvidia, known for providing powerful GPUs used in AI, has seen demand for its latest chips exceed supply, which could lead to substantial revenue growth.

Major clients like Microsoft, Amazon, and Alphabet all utilize Nvidia’s technology for their AI models and services. They also run cloud platforms that companies depend on for their own AI initiatives.

Meta Platforms, a significant player in the social media space, also collaborates with Nvidia. They’ve developed an open-source large language model called Llama, which enhances user engagement by integrating AI into content recommendations.

Furthermore, Apple launched Apple Intelligence last year, integrating advanced AI into its devices, positioning itself as one of the biggest distributors of AI software globally. Meanwhile, Tesla is at the forefront of AI-driven self-driving tech and robotics.

While the Vanguard ETF is heavily invested in the Magnificent Seven, it also provides broader diversification by including non-tech mega caps like Eli Lilly, Visa, Costco Wholesale, and McDonald’s within its top holdings.

Accelerating Returns with Vanguard ETFs

Since its inception in 2007, the Vanguard Mega Cap Growth ETF has achieved a compound annual return of 13.8%, with an exceptionally strong 18.9% over the last decade. However, due to the concentration risk, it’s not advisable to invest exclusively in this ETF.

Instead, it might serve as a perfect complement to a well-rounded portfolio that hasn’t invested much in the Magnificent Seven. For instance, if an investor had allocated $20,000 to the Vanguard Total Stock Market ETF, which holds a diverse range of stocks, that amount could have grown to about $78,825 over ten years.

However, if that investor divided their funds—putting $10,000 into the Vanguard Total Stock Market ETF and another $10,000 into the Vanguard Mega Cap Growth ETF—they would be looking at roughly $95,882 now.

This strategy not only aims to balance exposure to volatile sectors like AI but also helps mitigate losses should those tech expectations not pan out in the long run.