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Should Vanguard Mega Cap Growth ETF (MGK) Be on Your Investing Radar?
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Designed to provide broad exposure to the Large Cap Growth segment of the US equity market, the Vanguard Mega Cap Growth ETF (MGK - Free Report) is a passively managed exchange traded fund launched on 12/17/2007.
The fund is sponsored by Vanguard. It has amassed assets over $18.30 billion, making it one of the larger ETFs attempting to match the Large Cap Growth segment of the US equity market.
Why Large Cap Growth
Large cap companies usually have a market capitalization above $10 billion. Considered a more stable option, large cap companies boast more predictable cash flows and are less volatile than their mid and small cap counterparts.
Growth stocks have higher than average sales and earnings growth rates. While these are expected to grow faster than the broader market, they also have higher valuations. Something to keep in mind is the higher level of volatility that is affiliated with growth stocks. When you consider growth versus value, growth stocks are usually the clear winner in strong bull markets but tend to fall flat in nearly all other environments.
Costs
Cost is an important factor in selecting the right ETF, and cheaper funds can significantly outperform their more expensive counterparts if all other fundamentals are the same.
Annual operating expenses for this ETF are 0.07%, making it one of the least expensive products in the space.
It has a 12-month trailing dividend yield of 0.46%.
Sector Exposure and Top Holdings
While ETFs offer diversified exposure, which minimizes single stock risk, a deep look into a fund's holdings is a valuable exercise. And, most ETFs are very transparent products that disclose their holdings on a daily basis.
This ETF has heaviest allocation to the Information Technology sector--about 46.50% of the portfolio. Consumer Discretionary and Telecom round out the top three.
Looking at individual holdings, Apple Inc (AAPL - Free Report) accounts for about 15.09% of total assets, followed by Microsoft Corp (MSFT - Free Report) and Amazon.com Inc (AMZN - Free Report) .
The top 10 holdings account for about 59.79% of total assets under management.
Performance and Risk
MGK seeks to match the performance of the CRSP U.S. Mega Cap Growth Index before fees and expenses. The CRSP US Mega Cap Growth Index is a float-adjusted, market-capitalization-weighted index designed to measure equity market performance of mega-capitalization growth stocks in the United States.
The ETF return is roughly 9.12% so far this year and was up about 46.30% in the last one year (as of 02/12/2024). In the past 52-week period, it has traded between $184.36 and $283.18.
The ETF has a beta of 1.11 and standard deviation of 23.49% for the trailing three-year period, making it a medium risk choice in the space. With about 88 holdings, it effectively diversifies company-specific risk.
Alternatives
Vanguard Mega Cap Growth ETF holds a Zacks ETF Rank of 2 (Buy), which is based on expected asset class return, expense ratio, and momentum, among other factors. Because of this, MGK is an excellent option for investors seeking exposure to the Style Box - Large Cap Growth segment of the market. There are other additional ETFs in the space that investors could consider as well.
The Vanguard Growth ETF (VUG - Free Report) and the Invesco QQQ (QQQ - Free Report) track a similar index. While Vanguard Growth ETF has $114.18 billion in assets, Invesco QQQ has $248.29 billion. VUG has an expense ratio of 0.04% and QQQ charges 0.20%.
Bottom-Line
Retail and institutional investors increasingly turn to passively managed ETFs because they offer low costs, transparency, flexibility, and tax efficiency; these kind of funds are also excellent vehicles for long term investors.
To learn more about this product and other ETFs, screen for products that match your investment objectives and read articles on latest developments in the ETF investing universe, please visit Zacks ETF Center.
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Should Vanguard Mega Cap Growth ETF (MGK) Be on Your Investing Radar?
Designed to provide broad exposure to the Large Cap Growth segment of the US equity market, the Vanguard Mega Cap Growth ETF (MGK - Free Report) is a passively managed exchange traded fund launched on 12/17/2007.
The fund is sponsored by Vanguard. It has amassed assets over $18.30 billion, making it one of the larger ETFs attempting to match the Large Cap Growth segment of the US equity market.
Why Large Cap Growth
Large cap companies usually have a market capitalization above $10 billion. Considered a more stable option, large cap companies boast more predictable cash flows and are less volatile than their mid and small cap counterparts.
Growth stocks have higher than average sales and earnings growth rates. While these are expected to grow faster than the broader market, they also have higher valuations. Something to keep in mind is the higher level of volatility that is affiliated with growth stocks. When you consider growth versus value, growth stocks are usually the clear winner in strong bull markets but tend to fall flat in nearly all other environments.
Costs
Cost is an important factor in selecting the right ETF, and cheaper funds can significantly outperform their more expensive counterparts if all other fundamentals are the same.
Annual operating expenses for this ETF are 0.07%, making it one of the least expensive products in the space.
It has a 12-month trailing dividend yield of 0.46%.
Sector Exposure and Top Holdings
While ETFs offer diversified exposure, which minimizes single stock risk, a deep look into a fund's holdings is a valuable exercise. And, most ETFs are very transparent products that disclose their holdings on a daily basis.
This ETF has heaviest allocation to the Information Technology sector--about 46.50% of the portfolio. Consumer Discretionary and Telecom round out the top three.
Looking at individual holdings, Apple Inc (AAPL - Free Report) accounts for about 15.09% of total assets, followed by Microsoft Corp (MSFT - Free Report) and Amazon.com Inc (AMZN - Free Report) .
The top 10 holdings account for about 59.79% of total assets under management.
Performance and Risk
MGK seeks to match the performance of the CRSP U.S. Mega Cap Growth Index before fees and expenses. The CRSP US Mega Cap Growth Index is a float-adjusted, market-capitalization-weighted index designed to measure equity market performance of mega-capitalization growth stocks in the United States.
The ETF return is roughly 9.12% so far this year and was up about 46.30% in the last one year (as of 02/12/2024). In the past 52-week period, it has traded between $184.36 and $283.18.
The ETF has a beta of 1.11 and standard deviation of 23.49% for the trailing three-year period, making it a medium risk choice in the space. With about 88 holdings, it effectively diversifies company-specific risk.
Alternatives
Vanguard Mega Cap Growth ETF holds a Zacks ETF Rank of 2 (Buy), which is based on expected asset class return, expense ratio, and momentum, among other factors. Because of this, MGK is an excellent option for investors seeking exposure to the Style Box - Large Cap Growth segment of the market. There are other additional ETFs in the space that investors could consider as well.
The Vanguard Growth ETF (VUG - Free Report) and the Invesco QQQ (QQQ - Free Report) track a similar index. While Vanguard Growth ETF has $114.18 billion in assets, Invesco QQQ has $248.29 billion. VUG has an expense ratio of 0.04% and QQQ charges 0.20%.
Bottom-Line
Retail and institutional investors increasingly turn to passively managed ETFs because they offer low costs, transparency, flexibility, and tax efficiency; these kind of funds are also excellent vehicles for long term investors.
To learn more about this product and other ETFs, screen for products that match your investment objectives and read articles on latest developments in the ETF investing universe, please visit Zacks ETF Center.