Designed to provide broad exposure to the Large Cap Growth segment of the US equity market, the Vanguard Mega Cap Growth Index Fund ETF Shares (MGK) is a passively managed exchange traded fund launched on December 17, 2007.
The fund is sponsored by Vanguard. It has amassed assets over $32.99 billion, making it one of the largest ETFs attempting to match the Large Cap Growth segment of the US equity market.
Why Large Cap Growth
Large cap companies typically have a market capitalization above $10 billion. They tend to be stable companies with predictable cash flows and are usually less volatile than mid and small cap companies.
While growth stocks do boast higher than average sales and earnings growth rates, and they are expected to grow faster than the wider market, investors should note these kinds of stocks have higher valuations. Also, growth stocks are a type of equity that carries more risk compared to others. They are likely to outperform value stocks in strong bull markets but over the longer-term, value stocks have delivered better returns than growth stocks in almost all markets.
Costs
Investors should also pay attention to an ETF's expense ratio. Lower cost products will produce better results than those with a higher cost, assuming all other metrics remain the same.
Annual operating expenses for this ETF are 0.05%, making it one of the least expensive products in the space.
It has a 12-month trailing dividend yield of 0.33%.
Sector Exposure and Top Holdings
It is important to delve into an ETF's holdings before investing despite the many upsides to these kinds of funds like diversified exposure, which minimizes single stock risk. And, most ETFs are very transparent products that disclose their holdings on a daily basis.
This ETF has heaviest allocation to the Information Technology sector -- about 57.7% of the portfolio. Telecom and Consumer Discretionary round out the top three.
Looking at individual holdings, Nvidia Corp (NVDA) accounts for about 13.72% of total assets, followed by Apple Inc (AAPL) and Microsoft Corp (MSFT).
The top 10 holdings account for about 58.33% of total assets under management.
Performance and Risk
MGK seeks to match the performance of the CRSP U.S. Mega Cap Growth Index before fees and expenses. The CRSP US Mega Cap Growth Index is a float-adjusted, market-capitalization-weighted index designed to measure equity market performance of mega-capitalization growth stocks in the United States.
The ETF return is roughly 6.4% so far this year and is up about 19.15% in the last one year (as of 07/14/2026). In the past 52-week period, it has traded between $70.70 and $92.06.
The ETF has a beta of 1.24 and standard deviation of 19.87% for the trailing three-year period, making it a medium risk choice in the space. With about 62 holdings, it effectively diversifies company-specific risk.
Alternatives
Vanguard Mega Cap Growth Index Fund ETF Shares holds a Zacks ETF Rank of 2 (Buy), which is based on expected asset class return, expense ratio, and momentum, among other factors. Because of this, MGK is an excellent option for investors seeking exposure to the Style Box - Large Cap Growth segment of the market. There are other additional ETFs in the space that investors could consider as well.
The Vanguard Growth Index Fund ETF Shares (VUG) and the Invesco QQQ (QQQ) track a similar index. While Vanguard Growth Index Fund ETF Shares has $222.61 billion in assets, Invesco QQQ has $476.61 billion. VUG has an expense ratio of 0.03% and QQQ charges 0.18%.
Bottom-Line
Passively managed ETFs are becoming increasingly popular with institutional as well as retail investors due to their low cost, transparency, flexibility and tax efficiency. They are excellent vehicles for long term investors.
To learn more about this product and other ETFs, screen for products that match your investment objectives and read articles on latest developments in the ETF investing universe, please visit Zacks ETF Center.
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Vanguard Mega Cap Growth Index Fund ETF Shares (MGK): ETF Research Reports
This article originally published on Zacks Investment Research (zacks.com).