The Motley Fool·2025-12-27 10:00Core Insights - The Vanguard Growth ETF (VUG) and Vanguard Mega Cap Growth ETF (MGK) provide broad U.S. growth exposure but differ in their focus and structure [1] Group 1: Cost and Size Comparison - VUG has a lower expense ratio of 0.04% compared to MGK's 0.07%, making it more cost-effective for investors [2] - As of December 22, 2025, VUG's one-year return is 17.44%, while MGK's is 18.90% [2] - VUG has assets under management (AUM) of $353 billion, significantly larger than MGK's $33 billion [2] Group 2: Performance and Risk Analysis - Over the past five years, MGK has delivered a higher total return of $2,058 compared to VUG's $1,953, although both funds have similar maximum drawdowns of -35.61% for VUG and -36.02% for MGK [3] - Both funds exhibit comparable downside risk during market stress, indicating similar performance under adverse conditions [3] Group 3: Portfolio Composition - MGK focuses on 66 mega-cap growth stocks, with 58% of its assets in technology, heavily concentrating on top holdings like Nvidia, Apple, and Microsoft [4] - VUG is diversified across 160 large-cap growth stocks, with a sector mix of 53% technology, 14% communication services, and 14% consumer cyclical, providing a broader exposure [5] - The top three holdings in MGK constitute 38.26% of its total assets, while in VUG, they make up 33.51%, indicating a higher concentration in MGK [7] Group 4: Investment Implications - Investors seeking a targeted approach to mega-cap growth may prefer MGK, while those looking for greater diversification within the growth sector might opt for VUG [9] - Both ETFs are tech-heavy, but VUG includes a mix of large- and mega-cap stocks, offering a different risk-return profile [6]