Choosing Between Mega-Cap Tech Leaders and Broader Growth: MGK vs. VOOG Analysis

Which Growth ETF Fits Your Portfolio?

For U.S. equity investors seeking large-cap growth exposure, two Vanguard funds dominate the conversation: MGK (Vanguard Mega Cap Growth ETF) and VOOG (Vanguard S&P 500 Growth ETF). Both charge identical 0.07% annual fees, yet their strategies diverge significantly. MGK concentrates on the largest corporations—mega-cap titans with market capitalizations exceeding $200 billion—while VOOG captures the broader growth opportunity within the S&P 500’s 500 constituents. Understanding which aligns with your risk tolerance requires examining performance, composition, and volatility.

The Volatility Trade-Off: Risk vs. Reward

The performance data from the past five years reveals a clear pattern. MGK delivered stronger absolute returns—a $1,000 investment grew to $2,083 versus $1,978 for VOOG. However, this outperformance came with steeper volatility. MGK experienced a maximum drawdown of -36.02% compared to VOOG’s more moderate -32.74%.

Over the trailing 12 months, VOOG posted a 16.74% return versus MGK’s 15.09%—a notable reversal that suggests mega-cap concentration doesn’t always dominate. MGK’s beta of 1.24 indicates it swings more dramatically than the S&P 500, while VOOG’s 1.10 beta shows steadier movement. For income-seekers, VOOG offers a marginal advantage with a 0.48% dividend yield against MGK’s 0.37%.

Portfolio Composition: Concentration vs. Breadth

The fundamental difference lies in portfolio construction. MGK holds only 66 stocks—a concentrated bet on industry giants. Its sector allocation skews heavily toward technology at 58%, with the top three holdings (Nvidia, Apple, and Microsoft) comprising a substantial portion of assets.

VOOG spreads exposure across 217 holdings, delivering genuine diversification. Its technology sector represents 44% of the fund, with meaningful allocations to communication services and consumer cyclical stocks. This broader approach dilutes concentration risk but also moderates returns during pure tech rallies.

Both funds share the same top three holdings, yet their weighting differs materially. In VOOG, Nvidia, Microsoft, and Apple carry less outsized influence, allowing other growth stories to contribute to returns.

Asset Base and Market Position

With $33.0 billion in assets under management, MGK significantly outpaces VOOG’s $21.7 billion. This scale reflects investor appetite for mega-cap focused strategies but doesn’t necessarily indicate superior performance or lower costs.

Which Strategy Makes Sense?

MGK appeals to investors who: believe mega-cap corporations will continue commanding disproportionate growth, can tolerate higher volatility, and want concentrated exposure to the largest firms reshaping technology and markets.

VOOG suits investors seeking: balanced growth exposure without outsized tech risk, diversification across more business segments, and slightly smoother return patterns. Its 15+ year track record provides reassurance of stability.

Both funds demonstrate that low-cost, passive exposure to U.S. growth equities remains accessible. The choice hinges on conviction—do you believe mega-cap giants will outpace the broader market, or do you prefer spreading growth bets across more companies and sectors? Neither fund charges premium fees, so the decision rests on portfolio philosophy rather than cost considerations.