Better Vanguard ETF Buy: Mega-Cap Giant MGK vs. S&P 500 Powerhouse VOO

The Vanguard Mega Cap Growth ETF (NYSEMKT:MGK) and the Vanguard S&P 500 ETF (NYSEMKT:VOO) are some designed for investors seeking vulnerability to ample U.S. companies, but their approaches diverge: MGK tracks the largest maturation stocks, portion VOO mirrors the full S&P 500.

This examination highlights cardinal differences successful cost, performance, risk, and portfolio operation to assistance clarify which money whitethorn entreaty much to antithetic investors.

Beta measures terms volatility comparative to the S&P 500. The 1-yr instrumentality represents full instrumentality implicit the trailing 12 months.

VOO is somewhat much affordable connected fees with a little disbursal ratio. It besides provides a higher dividend yield, making VOO the lower-cost and higher-payout enactment for income-focused investors.

MGK targets the largest U.S. maturation stocks, holding conscionable 60 stocks. Around 55% of the portfolio is allocated to tech, followed by connection services astatine 17% and user cyclical astatine 13%.

Its apical 3 positions — Nvidia, Apple, and Microsoft — combined marque up astir 36% of assets. Launched implicit 18 years ago, MGK offers focused, semipermanent vulnerability to mega-cap maturation leaders.

VOO, by contrast, tracks the S&P 500 and holds 504 stocks, providing broader diversification. Its assemblage premix is little concentrated, with 35% successful technology, 13% successful fiscal services, and 11% successful connection services. Its apical holdings lucifer MGK’s, but their combined value is lower, reflecting VOO’s much balanced approach.

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VOO and MGK some absorption connected ample companies, but MGK takes a narrower attack by lone including mega-cap stocks — which are mostly defined arsenic those with marketplace caps of astatine slightest $200 billion.

More targeted funds similar MGK transportation some risks and rewards. Less diversification tin marque it much susceptible to marketplace swings, arsenic evidenced by MGK’s steeper max drawdown and higher beta, suggesting greater terms fluctuations.

VOO contains a wider assortment of stocks, making it somewhat much unchangeable betwixt the 2 funds. It’s little focused connected tech stocks, which tin assistance bounds volatility, and its assets are much evenly dispersed crossed the fund. The 2 funds stock the aforesaid apical 3 holdings, but those stocks marque up adjacent to 36% of MGK’s portfolio compared to astir 21% for VOO.