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VOO offers broader industry diversification and a higher dividend yield than MGK.
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MGK’s one- and five-year total returns are higher, but the drawdowns are larger.
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VOO trading offers greater liquidity and lower risk, making it attractive to investors looking for stability.
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both Vanguard Mega Cap Growth ETF (NYSE: MGK) and Vanguard S&P 500 ETF (NYSE: VOO) are passively managed Vanguard funds that target U.S. large-cap stocks, but their strategies differ: MGK favors high-growth large-cap stocks, while VOO reflects the entire S&P 500 index.
This comparison examines costs, returns, risks, industry tilts and portfolio construction to help clarify which approach may be more attractive depending on an investor’s priorities.
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Metric
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MGK
|
Woao
|
|
Issuer
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pioneer
|
pioneer
|
|
expense ratio
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0.07%
|
0.03%
|
|
1 year return (as of December 18, 2025)
|
14.12%
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11.98%
|
|
dividend yield
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0.37%
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1.12%
|
|
Beta version (monthly for 5 years)
|
1.24
|
1.00
|
|
AUM
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US$32.7 billion
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$1.5 trillion
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Beta measures price volatility relative to the S&P 500 Index. The 1-year return represents the total return over the past 12 months.
VOO charges a lower expense ratio and offers a significantly higher dividend yield, making it more affordable for cost- and income-conscious investors.
|
Metric
|
MGK
|
Woao
|
|
Maximum drawdown (5 years)
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-36.02%
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-24.53%
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|
$1,000 growth in 5 years
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$2,017 USD
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$1,819
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VOO holds 505 stocks and tracks the S&P 500 Index, providing a cross-section of the largest companies in the United States. Its industry allocation is led by technology (37% of total assets), financial services (13%) and consumer cycles (11%).
Its main holdings include NVIDIA, appleand Microsoftbut no industry or company is as dominant as some growth funds.
In contrast, MGK has a much higher concentration, holding only 66 stocks, with a heavy tilt toward technology (58%), followed by communication services (15%) and cyclical consumption (12%).
Its top three positions are comparable to VOO’s, but they represent a larger portion of the portfolio. That can drive strong tech markets to outperformance, but it can also amplify risks if the industry struggles.
For more guidance on ETF investing, check out our complete guide at this link.
VOO is a broad market fund that tracks the S&P 500 Index and offers substantial diversification across industries and individual holdings. Its holdings are about seven times larger than MGK’s and have a smaller tilt toward technology stocks, which can lead to greater stability and milder drawdowns during market volatility.
MGK, on the other hand, is more focused on targeted growth. With only a small stake in VOO, it’s less diversified and more tilted toward technology stocks.
Lack of diversity is both a strength and a weakness of MGK. Both funds hold the same top three stocks, but these stocks account for about 38% of MGK’s portfolio, while VOO accounts for about 22%. When these specific stocks are booming, MGK can significantly outperform VOO. But if they stumble, MGK will be hit harder.
This also makes MGK more prone to volatility, as shown by its higher beta and steeper maximum drawdown over the past five years. While it eventually surpassed VOO with higher one-year and five-year total returns, it had a bumpy ride along the way.
Investors who are more willing to accept risk in exchange for higher potential returns may prefer MGK, while risk-averse investors may prefer VOO’s long-term consistency and stability.
ETF: Exchange-traded fund; a pooled investment that trades like a single stock on a stock exchange.
Cost ratio: Annual fee, a percentage of assets, paid by investors to cover the fund’s operating costs.
Dividend Yield: The annual dividend paid by a fund divided by its current price, expressed as a percentage.
Beta version: A measure of an investment’s volatility relative to the overall market; 1.0 matches market volatility.
Asset management scale: Assets under management; a fund represents the total market value of assets under management for investors.
Maximum drawdown: The largest percentage decline observed for a fund from its peak to its lowest point over a period of time.
Total return: The price change of an investment plus any dividends and distributions, assuming the payouts were reinvested.
Industry allocation: The percentage of a fund’s assets invested in different industries.
Growth stocks: Company stocks are expected to grow faster than the market average, and profits are often reinvested rather than paying dividends.
Liquidity: The ease with which an asset can be bought and sold in the market without affecting its price.
Portfolio Building: The process of selecting and weighing assets within an investment fund to meet specific objectives.
Retracement: The value of an investment declines from a peak to a trough before reaching a new peak.
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Katie Brockman has a position in the Vanguard S&P 500 ETF. The Motley Fool holds and recommends the Apple, Microsoft, Nvidia and Vanguard S&P 500 ETFs. The Motley Fool recommends the following options: Long January 2026 Microsoft calls at $395 and short January 2026 Microsoft calls at $405. The Motley Fool has a disclosure policy.
VOO vs. MGK: Is S&P 500 diversification or mega-cap growth a better choice for investors? Originally posted by The Motley Fool
