How to Invest in Vanguard Mega-Cap Growth ETF (MGK)

What is Vanguard Mega Cap Growth ETF?

Vanguard Mega Cap Growth ETF (MGK) is a passively managed ETF that tracks the performance of the CRSP US Mega Cap Growth index. This index represents the largest 70% of the broader CRSP US Total Market index based on market capitalization, with a median market cap of $1.6 trillion.

The ETF is heavily weighted toward more innovative sectors, particularly technology, communications, and consumer discretionary. Due to its growth focus, the ETF includes companies with strong fundamentals, featuring high average earnings growth rates and impressive return on equity ratios.

Key facts about MGK

The Vanguard Mega Cap Growth ETF, trading under the ticker symbol MGK, launched on December 17, 2007, and is listed on the NYSE ARCA exchange.

It is classified as an domestic equity factor ETF, with a passive index-tracking strategy, and targets the large-cap growth segment of the U.S. stock market.

How to buy MGK

Buying shares of Vanguard Mega Cap Growth ETF is straightforward, just like buying any other ETF. Here's a quick rundown of the steps:

1. Open a brokerage account. If you don't already have one, you'll need a brokerage account that allows ETF trading. Most brokers do, but it's worth double-checking.
2. Determine how much to invest. Based on your risk tolerance and goals, decide how much you’re comfortable putting into this ETF.
3. Search for the ticker. Type the ticker -- MGK -- into your broker's search bar to pull up the ETF. Make sure you're selecting shares and not options or any other product.
4. Place your order. Enter the number of shares you want to buy, set your price (if placing a limit order), and submit.

Once your order is filled, you'll own shares of Vanguard Mega Cap Growth ETF (MGK).

Holdings of MGK

Vanguard Mega Cap Growth ETF's holdings replicate the CRSP US Mega Cap Growth index. Whenever the index is rebalanced or reconstituted, the fund's holdings are adjusted accordingly.

As of July 3, 2025, the ETF held 69 stocks, with the following top 10 holdings (with weights) per Morningstar:

• Microsoft (MSFT +0.56%) -- 13.10%
• Nvidia (NVDA +2.26%) -- 11.95%
• Apple (AAPL +1.25%) -- 11.62%
• Amazon (AMZN +1.43%) -- 7.36%
• Broadcom (AVGO +2.86%) -- 4.59%
• Meta Platforms (META +0.64%) -- 4.36%
• Tesla (TSLA -3.36%) -- 3.86%
• Visa (V +0.41%) -- 2.58%
• Eli Lilly (LLY +0.54%) -- 2.56%
• Alphabet (GOOGL +2.73%) -- 2.30%

Benefits and risks of investing in MGK

The ETF's ultra-low 0.07% expense ratio makes it one of the most cost-efficient options in its category. With a 0.38% 30-day SEC yield, MGK is also structured to be relatively tax-efficient, particularly for long-term holders.

The fund includes all members of the so-called “Magnificent Seven” tech stocks along with other prominent growth names, delivering diversified exposure to the sector through a single ticker.

MGK is highly liquid, has a long performance track record, and benefits from a large asset base. Its portfolio shows strong growth fundamentals, with an average earnings growth rate of 27.8% and a return on equity of 42.1%.

However, there are notable risks to consider. MGK is not an income-generating fund and offers minimal dividend yield. Valuations across the portfolio are stretched, with a price-to-earnings (P/E) ratio of 38.3 and a price-to-book (P/B) ratio of 12.7, leaving little margin for error.

The ETF is also heavily concentrated: Technology stocks account for 61.7% of the portfolio, and the top 10 holdings make up more than half of the total weight.

Should I invest in MGK?

If you meet most of the following criteria, MGK might be a suitable investment for you:

1. You are primarily bullish on mega-cap stocks with a median market capitalization in the trillions.
2. You want to focus on growth stocks with high earnings, high growth rates, and strong return on equity.
3. You're comfortable with significant exposure to the technology sector.
4. You're OK with a relatively narrow portfolio that is top-heavy.
5. You have a high risk tolerance and can handle the volatility of growth stocks.
6. You're investing with a buy-and-hold mindset and a long time horizon.

Does MGK pay a dividend?

Yes, MGK does pay a dividend, although it's modest. The ETF distributes dividends every quarter, usually with an ex-dividend date in the second-to-last week of the month and payable at the beginning of the following month.

However, since MGK focuses on growth stocks, the dividend yield is low. Most of the companies in this ETF reinvest their earnings and conduct share buybacks rather than paying substantial dividends.

As of July 3, 2025, MGK's 30-day SEC yield was just 0.38%, and it has historically hovered around that level. The bulk of MGK's returns come from capital appreciation rather than income.

What is MGK's expense ratio?

Like most Vanguard passively managed ETFs, MGK has a low expense ratio of just 0.07%.

An expense ratio represents the annual fee charged by the fund to cover management and operational costs. Although you don't pay this fee directly, it's deducted from the fund's returns over time, which slightly reduces your overall investment performance.

For a $10,000 investment, this translates to just $7 per year in fees, making MGK a very cost-effective option for long-term investors.

Historical performance of MGK

Here's a look at how MGK has performed in terms of total returns (i.e., with dividends reinvested) over various time periods:

The bottom line on MGK

Vanguard Mega Cap Growth ETF (MGK) is an extremely affordable way for investors to access the largest U.S. growth stocks through a single ticker. With an expense ratio of just 0.07%, it falls into the cheapest quintile of large-cap growth ETFs.

Additionally, its low yield and portfolio turnover make it particularly tax-efficient, offering a cost-effective option for long-term ETF investors looking for capital appreciation. Overall, it's one of the best ETFs one can buy.

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