Vanguard Growth ETF vs. Vanguard Mega Cap Growth ETF
Both the Vanguard Growth ETF (VUG) and the Vanguard Mega Cap Growth ETF (MGK) focus on aggressive growth areas within the U.S. stock market, spotlighting companies with strong earnings and potential for high earnings.
While they both follow similar investment strategies, this comparison sheds light on whether investors lean more towards the wider diversification of VUG or the more concentrated mega-cap focus provided by MGK.
Snapshots (cost and size)
| metric | VUG | MGK |
|---|---|---|
| Publisher | Vanguard | Vanguard |
| expense ratio | 0.03% | 0.05% |
| 1 year return (as of May 2, 2026) | 31.66% | 32.71% |
| dividend yield | 0.46% | 0.39% |
| Beta (monthly for 5 years) | 1.18 | 1.17 |
| Assets under management (AUM) | $317.9 billion | $27.9 billion |
Beta indicates how volatile a price is compared to the S&P 500, calculated from five years of monthly returns. The one-year return reflects the total return for the upcoming 12 months, while dividend yield is based on the trailing 12 months’ distribution yield.
When it comes to costs, both funds are relatively inexpensive, but VUG has a slightly lower expense ratio, which might make it an appealing option for investors. Plus, VUG’s dividend yield is marginally higher, which could attract those looking for income.
Comparing performance and risk
| metric | VUG | MGK |
|---|---|---|
| Maximum drawdown (5 years) | -35.61% | -36.02% |
| $1,000 growth in 5 years (total return) | $1,882 | $1,957 |
What’s inside
MGK comprises 59 stocks, giving it concentrated exposure to some of the largest growth stocks in the U.S. market, with a significant portion, around 55%, allocated to the technology sector, followed by communications services and consumer cycles. Its major holdings are Nvidia, Apple, and Microsoft.
On the other hand, VUG holds a broader range of 153 stocks. Its sector distribution is somewhat similar, with technology making up about 53% and communications services and consumer cyclicals following close behind. NVIDIA, Apple, and Microsoft also lead in VUG’s portfolio.
What this means for investors
Both VUG and MGK zero in on large-cap growth stocks; still, their variations in diversification and fund size might suit different investors’ needs.
MGK’s focus is narrower, holding less than half the number of stocks as VUG and solely targeting mega-cap stocks. Typically, mega-cap stocks boast market capitalizations of at least $200 billion, vastly exceeding the $10 billion standard for large-cap stocks.
Although the top sectors and major holdings align closely with VUG, MGK assigns slightly more weight to these stocks. Specifically, Nvidia, Apple, and Microsoft comprise 35.31% of MGK’s portfolio versus 34.73% for VUG.
This difference might seem minor but could influence performance if a specific stock has a particularly good or bad run in the future. Historically, both funds have reported nearly identical one-year total returns and similar five-year maximum drawdowns, leading to minimal impact from these differences.
Interestingly, MGK has shown a slight edge over VUG in five-year growth, likely due to the tech sector’s remarkable performance in recent times, possibly giving MGK an advantage over other ETFs.
Ultimately, both ETFs can serve investors well depending on their individual goals. If someone prefers a more diversified approach, especially across large-cap and mega-growth stocks, VUG’s broader scope might be more suitable. However, those keen on focusing on the top-tier U.S. stocks may find MGK to be a better fit.
