Both the Vanguard Mega Cap Growth ETF and the Invesco QQQ Trust, Series 1 aim at the heavyweights of the US market, particularly focusing on high-growth firms that hold strong positions in their sectors.
While QQQ follows the 100 largest non-financial companies listed on Nasdaq, MGK adheres to the Mega Cap Growth Index. This leads to varied risk and reward profiles for investors drawn to growth, despite their portfolios having considerable overlap.
Snapshots (cost and size)
| Metric | QQQ | MGK |
|---|---|---|
| Publisher | Invesco | Vanguard |
| Expense Ratio | 0.18% | 0.05% |
| 1 Year Return (as of May 8, 2026) | 44.5% | 36.0% |
| Dividend Yield | 0.42% | 0.34% |
| Beta (monthly for 5 years) | 1.18 | 1.20 |
| Assets Under Management (AUM) | $440.3 billion | $32 billion |
Beta reflects price volatility relative to the S&P 500, calculated from five years of monthly returns. One year’s return represents the total for the subsequent 12 months.
MGK is the more cost-effective choice, with an expense ratio that is under a third of QQQ’s. Both funds provide avenues for growth at low costs, but the variances in fees can significantly affect long-term savings in larger accounts.
Comparing performance and risk
| Metric | QQQ | MGK |
|---|---|---|
| Maximum Drawdown (5 years) | -35.1% | -36.0% |
| $1,000 Growth in 5 Years (total return) | $2,143 | $2,033 |
What’s inside
MGK emphasizes major growth stocks, consisting of 59 holdings. Technology encompasses 55% of its sector allocation, while communications services and consumer cyclicals make up 17% and 13%, respectively. Its top holdings are Nvidia, Apple, and Microsoft.
On the other hand, QQQ tracks 102 stocks, reflecting similar sector trends, with technology representing 54%, and communications services and consumer cyclicals accounting for 16% and 12%. Just like MGK, its biggest stakes are also in Nvidia, Apple, and Microsoft.
What this means for investors
Both QQQ and MGK target large growth firms, but MGK narrows its focus more. QQQ accommodates both large-cap and mega-cap stocks, whereas MGK zeroes in on mega-cap stocks.
Each fund has tech stocks making up just over half their portfolios, but MGK is heavily weighted in the three leading stocks. Nvidia, Apple, and Microsoft collectively represent 35.31% of MGK’s holdings, in contrast to 20.87% for QQQ. This distribution can lead to variations in total returns, depending on the performance of these key stocks.
The risk profiles of the two funds are rather alike, showcasing comparable beta values and maximum drawdowns. However, QQQ tends to have a slight edge over MGK in terms of one-year and five-year total returns.
Fees may be significant for certain investors. With MGK’s expense ratio at 0.05% versus QQQ’s 0.18%, this difference means a payment of $5 annually for each $10,000 invested in MGK compared to $18 for the same investment in QQQ. Over time, these fees can accumulate substantially.
QQQ might appeal to investors seeking more diversification within the large-cap growth sector, while MGK may suit those looking for targeted exposure to the largest growth stocks.
Should you buy Vanguard Mega Cap Growth ETF stock now?
Before considering shares of the Vanguard Mega Cap Growth ETF, you might want to keep the following in mind:
According to our analyst team, there are currently ten stocks recommended that they believe have strong potential returns in the forthcoming years, and Vanguard Mega Cap Growth ETF is not included among them.
Think of stocks like Netflix or Nvidia. If you invested $1,000 when they were first recommended, the returns could be astonishing in the long run.
It’s worth noting that the overall average return of the Stock Advisor program has significantly outperformed the S&P 500.
For details on stocks that could be beneficial investments right now, remember to review the latest top list, created by a team of retail investors.
