Battle of the Tech Giants: Is MGK or VUG the Better ETF for Long-Term Growth? | The Motley Fool

The Vanguard Growth ETF ( VUG +0.00%) and the Vanguard Mega Cap Growth ETF ( MGK +0.01%) both offer broad U.S. growth exposure, but with different approaches: VUG tracks a wider basket of large-cap growth names, while MGK zeroes in on the largest mega-cap growth stocks. Investors comparing these two may want to weigh differences in sector tilts, portfolio concentration, and cost. Snapshot (cost & size) Metric VUG MGK Issuer Vanguard Vanguard Expense ratio 0.04% 0.07% 1-yr return (as of Dec. 22, 2025) 17.44% 18.90% Dividend yield 0.42% 0.37% AUM $353 billion $33 billion Beta (5Y monthly) 1.23 1.24 Beta measures price volatility relative to the S&P 500. The 1-yr return represents total return over the trailing 12 months. VUG is more affordable on fees with a lower expense ratio than MGK, though both are among the cheapest index ETFs. Dividend yields are also similar, but VUG offers a slight edge for income-focused investors. Performance & risk comparison Metric VUG MGK Max drawdown (5 y) -35.61% -36.02% Growth of $1,000 over 5 years $1,953 $2,058 Over the past five years, MGK delivered a higher total return. However, both funds experienced similar maximum drawdowns, suggesting comparable downside risk during market stress. What's inside MGK focuses on mega-cap growth stocks and holds just 66 companies, with technology making up 58% of assets. Its top holdings are Nvidia , Apple , and Microsoft . With a heavy concentration in tech, this fund's performance is closely tied to the largest U.S. tech names. By contrast, VUG is spread across 160 large-cap growth stocks, with a sector mix of 53% technology, 14% communication services, and 14% consumer cyclical. Its leading positions are also Nvidia, Apple, and Microsoft, but each makes up a smaller slice of the portfolio compared to MGK. This broader diversification may appeal to those wanting less exposure to tech mega-caps. For more guidance on ETF investing, check out the full guide at this link . What this means for investors Both VUG and MGK are focused on tech-heavy growth, but VUG contains large- and mega-cap growth stocks, while MGK is focused exclusively on mega-caps. Mega-cap stocks are the largest of the large, generally defined as companies with a market cap of at least $200 billion -- compared to the $10 billion threshold for large-cap stocks. These stocks are industry-leading juggernauts, which can add some stability, as they're often more likely to recover from market downturns. That said, MGK's hyperfocus on a small selection of mega-cap growth stocks significantly limits its diversification. It's more heavily weighted toward the tech industry, and while its top three holdings match VUG's, those three stocks alone make up 38.26% of the fund's total assets -- compared to 33.51% for VUG. Performance-wise, the two funds are similar. While MGK has slightly outperformed VUG in both 12-month and five-year total returns, the difference is marginal. With similar expense ratios and dividend yields, investors also won't notice a significant difference in fees or investment income. The primary difference between the...

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