Vanguard Growth ETF vs. Vanguard Mega Cap Growth ETF: How They Compare on Costs, Returns, and Risk

Key Points

The Vanguard Mega Cap Growth ETF (MGK) concentrates on a much narrower portfolio of holdings compared to the Vanguard Growth ETF (VUG).

VUG offers a lower expense ratio of 0.03%, while MGK charges 0.05% annually.

MGK has delivered slightly higher five-year returns, but the two funds are similar in one-year total returns.

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Both the Vanguard Growth ETF (NYSEMKT:VUG) and the Vanguard Mega Cap Growth ETF (NYSEMKT:MGK) target the aggressive growth segment of the U.S. equity market, emphasizing companies with robust earnings and revenue potential.

While they share similar investment philosophies, this comparison highlights whether an investor may prefer the broader diversification of VUG or the narrower mega-cap focus provided by MGK.

Snapshot (cost & size)

| Metric | VUG | MGK | |---|---|---| | Issuer | Vanguard | Vanguard | | Expense ratio | 0.03% | 0.05% | | 1-yr return (as of May 2, 2026) | 31.66% | 32.71% | | Dividend yield | 0.46% | 0.39% | | Beta (5Y monthly) | 1.18 | 1.17 | | Assets under management (AUM) | $317.9 billion | $27.9 billion |

Both funds are low-cost options, though VUG is slightly more affordable with a lower expense ratio. Investors looking for higher payouts may prefer VUG, which offers a slightly higher dividend yield.

Performance & risk comparison

| Metric | VUG | MGK | |---|---|---| | Max drawdown (5 yr) | -35.61% | -36.02% | | Growth of $1,000 over 5 years (total return) | $1,882 | $1,957 |

What's inside

MGK contains 59 holdings and provides concentrated exposure to the largest growth stocks in the U.S. market. Its sector allocation leans heavily toward technology, accounting for 55% of assets, followed by communication services and consumer cyclical. Its largest positions include Nvidia, Apple, and Microsoft.

VUG tracks a broader set of 153 holdings. Its sector profile is similar, with technology at 53%, with communication services and consumer cyclical rounding out the top three sectors. Its top holdings are also Nvidia, Apple, and Microsoft, matching MGK.

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What this means for investors

While both VUG and MGK focus on large-cap growth stocks, their differences in diversification and fund size could be meaningful for some investors.

MGK is much narrower, with fewer than half the holdings of VUG. It focuses solely on mega-cap stocks, which are generally defined as companies with a market cap of at least $200 billion — significantly larger than the $10 billion threshold for large-cap stocks.

Although its top sectors and holdings match VUG, it assigns greater weight to those stocks. Nvidia, Apple, and Microsoft make up 35.31% of MGK’s portfolio, compared to 34.73% for VUG.

It’s a slight difference, but it could affect performance if those particular stocks over- or underperform going forward. Historically, it hasn’t made a significant impact, as the two funds have earned nearly identical one-year total returns and very similar five-year max drawdowns.

MGK has marginally outperformed VUG in five-year growth, suggesting that the tech sector’s staggering earnings in recent years have helped this fund edge ahead of similar ETFs.

Both funds can be smart buys depending on your goals. Investors seeking more diversification across both large- and mega-cap growth stocks may prefer VUG’s broader reach, while those looking to zero in on the largest U.S. stocks might opt for MGK.

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Katie Brockman has positions in Vanguard Growth ETF. The Motley Fool has positions in and recommends Apple, Microsoft, Nvidia, and Vanguard Growth ETF. The Motley Fool has a disclosure policy.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.