Is VOO or MGK the Better Vanguard ETF Buy Right Now? Here's What Investors Need to Know.

Core Insights - The Vanguard Mega Cap Growth ETF (MGK) and the Vanguard S&P 500 ETF (VOO) are designed to track large-cap U.S. stock performance, with MGK focusing on the largest growth companies and VOO tracking the full S&P 500 [1] Cost & Size Comparison - VOO has a lower expense ratio of 0.03% compared to MGK's 0.05% - VOO offers a higher dividend yield of 1.11% versus MGK's 0.36% - VOO has a significantly larger asset under management (AUM) of $839 billion compared to MGK's $32 billion [2] Performance & Risk Analysis - Over the past five years, MGK has provided a higher total return, growing $1,000 to $1,846, while VOO grew to $1,782 - MGK has a maximum drawdown of -36.02%, which is deeper than VOO's -24.53% - MGK's beta of 1.17 indicates greater price volatility compared to VOO's beta of 1.00 [3] Portfolio Composition - MGK consists of 60 stocks, with a heavy allocation of 55% in technology and 17% in communication services, with top holdings in Nvidia, Apple, and Microsoft - VOO holds 504 stocks, reflecting the sector weights of the S&P 500, with a more diversified portfolio including significant exposure to financial services and consumer cyclical sectors [4][5] Investment Implications - MGK targets mega-cap stocks, defined as those with a market cap of at least $200 billion, while VOO offers broader diversification that may mitigate volatility [6] - VOO's lower tech allocation (around 35%) compared to MGK's (55%) may result in less severe drawdowns during tech downturns [7] - A more concentrated portfolio like MGK's can lead to higher long-term earnings potential, but it also carries the risk of underperformance from individual stocks [8] - Investors willing to accept higher risk for potential higher returns may find MGK appealing, while those seeking stability may prefer VOO [9]