SCHG vs. MGK: Are Investors Better Off With Diversified Tech Exposure or a Mega-Cap ETF?

Core Insights - The Vanguard Mega Cap Growth ETF (MGK) and the Schwab U.S. Large-Cap Growth ETF (SCHG) provide low-cost exposure to U.S. large-cap growth stocks, but differ in concentration and diversification strategies [1][2] Cost and Size Comparison - MGK has an expense ratio of 0.07%, while SCHG has a lower expense ratio of 0.04%, making SCHG slightly more affordable for fee-conscious investors [3] - As of January 11, 2026, MGK's one-year return is 21.82% compared to SCHG's 18.59% [3] - Both ETFs have nearly identical dividend yields, with MGK at 0.35% and SCHG at 0.36% [3] - MGK has assets under management (AUM) of $32.5 billion, while SCHG has a larger AUM of $52.9 billion [3] Performance and Risk Comparison - Over the past five years, MGK experienced a maximum drawdown of -36.02%, while SCHG had a slightly lower drawdown of -34.59% [4] - The growth of a $1,000 investment over five years would result in $2,013 for MGK and $2,015 for SCHG, indicating similar performance [4] Portfolio Composition - SCHG tracks the Dow Jones U.S. Large-Cap Growth Total Stock Market Index and holds 198 large-cap stocks, with technology making up approximately 45% of its total assets [5] - MGK is more concentrated, holding only 66 stocks, with nearly 56% of its assets allocated to the technology sector [6] - The top three holdings for both ETFs are Nvidia, Apple, and Microsoft, but they account for nearly 37% of MGK's assets compared to about 30% for SCHG [6] Investment Implications - MGK's concentrated approach may lead to higher volatility and greater susceptibility to market fluctuations, while SCHG's diversified strategy may reduce short-term volatility [7][9] - Investors seeking broader access to large-cap stocks may prefer SCHG, while those targeting the largest companies in the tech sector may find MGK more appealing [10]