MGK vs. VOOG: Which Growth-Focused ETP Cap Strategy Fits Your Portfolio?

Understanding the Core Difference

Vanguard Mega Cap Growth ETF (MGK) and Vanguard S&P 500 Growth ETF (VOOG) pursue similar objectives with identical expense ratios of 0.07%, yet they diverge significantly in scope and composition. VOOG casts a wider net across 217 stocks from the S&P 500 Growth Index, while MGK narrows its focus to just 66 mega-cap growth companies—those with market capitalizations exceeding $200 billion. This fundamental distinction shapes their risk-return characteristics and suitability for different investor profiles.

Performance Review: Returns and Drawdowns

Over the past five years, both funds demonstrated comparable one-year performance, with MGK achieving 22.76% total return and VOOG at 22.86%. However, their longer-term trajectories reveal important differences. A $1,000 investment in MGK five years ago would have grown to $2,087, compared to $1,953 in VOOG—representing MGK’s outperformance by $134.

Yet this stronger absolute return came with higher volatility. MGK experienced a maximum drawdown of -36.02% during market turbulence, while VOOG’s steepest decline reached -32.74%. This 3.28 percentage point gap reflects MGK’s concentrated positioning and heavy technology sector tilt, which amplifies both upside and downside moves relative to the broader market.

Portfolio Composition and Sector Exposure

VOOG’s 217-stock portfolio maintains a 44% allocation to technology, balanced by meaningful positions in communication services and consumer cyclicals. Its largest holdings—Nvidia, Microsoft, and Apple—each represent less than 15% of fund assets, limiting single-company risk.

MGK’s concentrated approach allocates 57% to technology across just 66 holdings, creating a more aggressive growth bias. The same three mega-cap tech giants dominate MGK as well, but their combined weight in this fund exceeds their individual caps in VOOG, amplifying technology sector dependency within a smaller opportunity set.

Both funds employ no leverage and avoid specialty tilts beyond their inherent growth orientation.

Cost and Income Characteristics

The identical 0.07% expense ratio eliminates cost as a differentiator. However, dividend yield provides a modest edge to VOOG at 0.49% versus MGK’s 0.38%, offering income-conscious growth investors slightly better cash distribution. For investors prioritizing total return over dividend income, this distinction remains marginal but worthy of consideration.

Volatility Metrics and Risk Appetite

Beta analysis reinforces the risk profile difference. MGK’s 5-year monthly beta of 1.13 indicates it swings 13% more dramatically than the S&P 500, while VOOG’s beta of 1.03 tracks closer to market movement. This mathematical relationship directly correlates to real portfolio behavior during market corrections and rallies.

Strategic Considerations for Investor Selection

Choose VOOG if you prioritize:

• Reduced concentration risk through broader diversification
• More balanced sector exposure with lower volatility
• Slightly higher dividend yield for income supplementation
• Smoother drawdown recovery trajectories during market stress

Choose MGK if you seek:

• Maximum exposure to mega-cap growth companies with explosive potential
• Concentrated technology sector participation during tech industry booms
• Acceptance of steeper drawdowns in exchange for higher growth potential
• ETP cap strategies emphasizing elite mega-cap market leaders

Both funds share identical costs and comparable near-term returns. The meaningful divergence lies in diversification breadth, risk tolerance requirements, and sector conviction. VOOG suits investors favoring stability within growth, while MGK appeals to those comfortable with concentrated, volatile positions for outsized potential gains. Your choice ultimately depends on whether you prioritize portfolio resilience or concentrated growth exposure.