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Should Vanguard Mega Cap ETF (MGC) Be on Your Investing Radar?
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If you're interested in broad exposure to the Large Cap Blend segment of the US equity market, look no further than the Vanguard Mega Cap ETF (MGC - Free Report) , a passively managed exchange traded fund launched on 12/17/2007.
The fund is sponsored by Vanguard. It has amassed assets over $3.61 billion, making it one of the larger ETFs attempting to match the Large Cap Blend segment of the US equity market.
Why Large Cap Blend
Large cap companies typically have a market capitalization above $10 billion. They tend to be stable companies with predictable cash flows and are usually less volatile than mid and small cap companies.
Blend ETFs usually hold a mix of growth and value stocks as well as stocks that exhibit both value and growth characteristics.
Costs
Investors should also pay attention to an ETF's expense ratio. Lower cost products will produce better results than those with a higher cost, assuming all other metrics remain 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 1.48%.
Sector Exposure and Top Holdings
Even though ETFs offer diversified exposure that minimizes single stock risk, investors should also look at the actual holdings inside the fund. Luckily, most ETFs are very transparent products that disclose their holdings on a daily basis.
Looking at individual holdings, Apple Inc. (AAPL - Free Report) accounts for about 8.30% of total assets, followed by Microsoft Corp. (MSFT - Free Report) and Amazon.com Inc. (AMZN - Free Report) .
The top 10 holdings account for about 28.6% of total assets under management.
Performance and Risk
MGC seeks to match the performance of the CRSP US Mega Cap Index before fees and expenses. The CRSP U.S. Mega Cap Index includes the largest U.S. companies, with a target of including the top 70% of investable market capitalization. The index includes securities traded on NYSE, NYSE Market, NASDAQ or ARCA.
The ETF has lost about -19.67% so far this year and is down about -5.17% in the last one year (as of 05/20/2022). In the past 52-week period, it has traded between $135.57 and $169.35.
The ETF has a beta of 1 and standard deviation of 23.67% for the trailing three-year period, making it a medium risk choice in the space. With about 244 holdings, it effectively diversifies company-specific risk.
Alternatives
Vanguard Mega Cap 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, MGC is an excellent option for investors seeking exposure to the Style Box - Large Cap Blend segment of the market. There are other additional ETFs in the space that investors could consider as well.
The iShares Core S&P 500 ETF (IVV - Free Report) and the SPDR S&P 500 ETF (SPY - Free Report) track a similar index. While iShares Core S&P 500 ETF has $281.56 billion in assets, SPDR S&P 500 ETF has $350.16 billion. IVV has an expense ratio of 0.03% and SPY charges 0.09%.
Bottom-Line
While an excellent vehicle for long term investors, passively managed ETFs are a popular choice among institutional and retail investors due to their low costs, transparency, flexibility, and tax efficiency.
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 ETF (MGC) Be on Your Investing Radar?
If you're interested in broad exposure to the Large Cap Blend segment of the US equity market, look no further than the Vanguard Mega Cap ETF (MGC - Free Report) , a passively managed exchange traded fund launched on 12/17/2007.
The fund is sponsored by Vanguard. It has amassed assets over $3.61 billion, making it one of the larger ETFs attempting to match the Large Cap Blend segment of the US equity market.
Why Large Cap Blend
Large cap companies typically have a market capitalization above $10 billion. They tend to be stable companies with predictable cash flows and are usually less volatile than mid and small cap companies.
Blend ETFs usually hold a mix of growth and value stocks as well as stocks that exhibit both value and growth characteristics.
Costs
Investors should also pay attention to an ETF's expense ratio. Lower cost products will produce better results than those with a higher cost, assuming all other metrics remain 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 1.48%.
Sector Exposure and Top Holdings
Even though ETFs offer diversified exposure that minimizes single stock risk, investors should also look at the actual holdings inside the fund. Luckily, most ETFs are very transparent products that disclose their holdings on a daily basis.
Looking at individual holdings, Apple Inc. (AAPL - Free Report) accounts for about 8.30% of total assets, followed by Microsoft Corp. (MSFT - Free Report) and Amazon.com Inc. (AMZN - Free Report) .
The top 10 holdings account for about 28.6% of total assets under management.
Performance and Risk
MGC seeks to match the performance of the CRSP US Mega Cap Index before fees and expenses. The CRSP U.S. Mega Cap Index includes the largest U.S. companies, with a target of including the top 70% of investable market capitalization. The index includes securities traded on NYSE, NYSE Market, NASDAQ or ARCA.
The ETF has lost about -19.67% so far this year and is down about -5.17% in the last one year (as of 05/20/2022). In the past 52-week period, it has traded between $135.57 and $169.35.
The ETF has a beta of 1 and standard deviation of 23.67% for the trailing three-year period, making it a medium risk choice in the space. With about 244 holdings, it effectively diversifies company-specific risk.
Alternatives
Vanguard Mega Cap 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, MGC is an excellent option for investors seeking exposure to the Style Box - Large Cap Blend segment of the market. There are other additional ETFs in the space that investors could consider as well.
The iShares Core S&P 500 ETF (IVV - Free Report) and the SPDR S&P 500 ETF (SPY - Free Report) track a similar index. While iShares Core S&P 500 ETF has $281.56 billion in assets, SPDR S&P 500 ETF has $350.16 billion. IVV has an expense ratio of 0.03% and SPY charges 0.09%.
Bottom-Line
While an excellent vehicle for long term investors, passively managed ETFs are a popular choice among institutional and retail investors due to their low costs, transparency, flexibility, and tax efficiency.
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.