Meet the Low-Cost Vanguard ETF With 51.8% Invested in Nvidia, Apple, Alphabet, Microsoft, and Amazon While VOO Has Just 30%

On Sept. 21, the Nasdaq Composite (NASDAQINDEX: ^IXIC) closed at its all-time high while the S&P 500 (SNPINDEX: ^GSPC) closed less than 0.5% from its all-time high. The technology sector is largely responsible for driving the indexes to new heights. As of market close on Sept. 25, it's less than 1% off its all-time high -- by far the best of any sector. Meanwhile, healthcare is down 2.6% from its all-time high, and the other nine sectors are down more than 5% from their highs.

Investors looking for outsize exposure to top growth stocks have come to the right place. The Vanguard S&P 500 ETF (NYSEMKT: VOO) -- which mirrors the performance of the S&P 500 -- has a combined 30% weighting in its five largest holdings -- which are Nvidia (NASDAQ: NVDA), Apple (NASDAQ: AAPL), Alphabet (NASDAQ: GOOG) (NASDAQ: GOOGL), Microsoft (NASDAQ: MSFT), and Amazon (NASDAQ: AMZN). By comparison, the Vanguard Morningstar Mega Cap Growth ETF (NYSEMKT: MGK) has a whopping 51.8% invested in those five stocks alone.

Here's why the Mega Cap Growth ETF stands out as a better buy for growth investors than an S&P 500 ETF, and some risks worth considering before buying.

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Over two-thirds of MGK is invested in just 10 stocks

The Mega Cap Growth ETF has a 0.05% expense ratio, compared with 0.03% for the Vanguard S&P 500 ETF. So it's only marginally more expensive from a fee standpoint -- with 0.05% equating to $5 for every $10,000 invested compared to $3 for the S&P 500 ETF.

The 10 largest holdings in the Mega Cap Growth ETF make up 69% of the fund, while 39.2% of the S&P 500 ETF is invested in its top 10 holdings.

Extreme concentration is a double-edged sword, as it can amplify gains when top stocks are doing well but magnify losses if there's a downturn in a theme shared among top holdings, which, in the case of the largest U.S. growth stocks, is artificial intelligence (AI).

Mega-cap growth stocks have gotten cheaper

Some mega-cap growth stock valuations have been falling because earnings growth rates have been so impressive. The Mega Cap Growth ETF used to trade at a steep premium to the S&P 500 ETF and the Vanguard Morningstar Growth ETF (NYSEMKT: VUG) -- which is less concentrated, with 147 holdings, compared to 56 for the Mega Cap Growth ETF. But the gap has narrowed, as the Mega Cap Growth ETF has a price-to-earnings ratio of 31.2, compared with 31 for the Growth ETF and 25 for the S&P 500 ETF.

As a group, mega-cap growth stocks no longer command premiums over large-cap growth stocks because investors are skeptical that rapid earnings growth can continue and that AI investments will pay off. And that risk is concentrated in today's most valuable companies.

A dose of healthy skepticism is valid. Formerly capital-light and predictable businesses like Amazon, Alphabet, and Microsoft are now capital-intensive and feature higher-risk outlooks. But long-term investors would likely prefer that these companies take risks and bet on multi-year runways for AI-driven growth rather than be overly cautious or deploy capital toward stock buybacks instead of long-term investments. Buybacks would accelerate near-term earnings growth and make valuations even cheaper, but they could come at the expense of long-term market share erosion.

History is littered with examples of former industry leaders that become complacent and assumed their product moats were impenetrable, only to be overtaken by a competitor that wasn't even on their radar -- like Netflix surpassing Blockbuster, Apple leaving BlackBerry in the dust, or International Business Machines failing to pivot to personal computers even though it had a dominant mainframe computer market share.

Scale matters

The Vanguard Mega Cap Growth ETF is a good buy for investors who believe today's leading growth companies are well-positioned to capitalize on AI. Nvidia, Broadcom, and Advanced Micro Devices are well-positioned to meet increased demand for AI compute and inference -- especially as AI use cases broaden to agentic AI and physical AI (such as robotics and self-driving cars).

AI's traction depends on people using it in their day-to-day lives and workflows, which makes Apple's role so important. Its integrated product ecosystem and services provide a direct touchpoint between models and users. Apple offers users a variety of AI tools and models to cater to customer preferences rather than betting on only one solution.

Alphabet, Amazon, Microsoft, and Meta Platforms are four of the largest hyperscalers, as they are buying massive amounts of computing to power cloud computing, AI infrastructure, model training, integrated AI software solutions, and more.

Tesla is a leader in robotics and self-driving cars, making it increasingly well-positioned to implement physical AI at scale.

Eli Lilly rounds out the 10 largest holdings in the Mega Cap Growth ETF. It is a leading healthcare company that is using AI in its biotech research and trials. In October 2025, Eli Lilly partnered with Nvidia to build its own AI factory for biotech research, powered by 1,016 Nvidia Blackwell Ultra GPUs -- the most advanced GPU before Rubin.

AI is incredibly capital-intensive, so the companies that can afford to take risks are ultimately the best positioned to capitalize on the technology in the long term. Investors who agree with that thesis will find the Mega Cap Growth ETF one of the best low-cost ETFs to buy now, as it bets big on industry leaders who have the dry powder needed to invest in AI at scale.

Daniel Foelber has positions in Broadcom, Netflix, and Nvidia. The Motley Fool has positions in and recommends Advanced Micro Devices, Alphabet, Amazon, Apple, Broadcom, Eli Lilly, International Business Machines, Meta Platforms, Microsoft, Netflix, Nvidia, Tesla, Vanguard Morningstar Growth ETF, and Vanguard S&P 500 ETF. The Motley Fool recommends BlackBerry. The Motley Fool has a disclosure policy.