QQQ vs. MGK: How These Two Tech-Focused Growth ETFs Compare for Investors
Key Points
Vanguard Mega Cap Growth ETF charges a lower expense ratio than Invesco QQQ Trust, Series 1, but QQQ is significantly larger and more liquid.
QQQ holds more stocks and offers slightly higher sector exposure to communication services, while both funds are heavily tech-weighted.
Recent performance and risk metrics for both ETFs are similar, with MGK showing a marginally higher five-year return and drawdown.
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Both the Vanguard Mega Cap Growth ETF (NYSEMKT:MGK) and Invesco QQQ Trust, Series 1 (NASDAQ:QQQ) provide exposure to the largest U.S. growth companies, with a major tilt toward technology, specifically. This comparison looks at cost, returns, risk, portfolio makeup, and key practical differences to help clarify which fund may appeal to different investor needs.
Snapshot (cost & size)
| Metric | MGK | QQQ |
|---|---|---|
| Issuer | Vanguard | Invesco |
| Expense ratio | 0.07% | 0.20% |
| 1-yr return (as of Nov. 17, 2025) | 21.82% | 21.09% |
| Dividend yield | 0.38% | 0.47% |
| Beta (5Y monthly) | 1.13 | 1.10 |
| AUM | $31.28 billion | $385.76 billion |
Beta measures price volatility relative to the S&P 500. The 1-yr return represents total return over the trailing 12 months.
MGK offers a significantly lower expense ratio, which can be an advantage for investors who are fee-conscious. QQQ, in contrast, delivers a slightly higher dividend payout, which may appeal to those seeking more income from their growth allocation.
Performance & risk comparison
| Metric | MGK | QQQ |
|---|---|---|
| Max drawdown (5 y) | -36.02% | -35.12% |
| Growth of $1,000 over 5 years | $2,080 | $2,051 |
What's inside
Launched in 1999, QQQ tracks the NASDAQ-100 Index and spans 101 holdings, with a sector mix of 54% technology, 17% communication services, and 13% consumer cyclical. Its largest positions are Nvidia, Microsoft, and Apple, each representing less than 10% of total assets. The fund’s immense scale and long track record make it one of the most traded ETFs in the world.
MGK, by contrast, focuses on the 66 largest U.S. growth stocks. It has similar sector allocations to QQQ, with 57% of the fund devoted to technology, 15% to communication services, and 13% to consumer cyclical. Its top holdings mirror QQQ’s, but with slightly larger allocations to each.
Neither fund includes notable quirks or nonstandard features, and both offer broad exposure to U.S. mega cap growth -- though MGK’s smaller roster may result in more concentrated exposures.
For more guidance on ETF investing, check out the full guide at this link.
Foolish take
QQQ and MGK both target growth stocks with a specific focus on technology companies. More than half of both ETFs are dedicated to tech stocks, which can lead to above-average returns during tech rallies but also steeper drawdowns amid periods of volatility.
QQQ contains more holdings in total than MGK, which can give it an edge in terms of diversification. Its top three holdings also make up slightly less of the fund's total assets compared to MGK, which also favors diversification.
While QQQ offers a higher dividend yield, its higher expense ratio can erode some of those earnings. Its 0.20% fee is nearly triple MGK's 0.07%, which can be a drawback for investors with large account balances.
In short, QQQ has an edge in terms of its sheer size, diversification, and dividend yield. But MGK shines with its lower fees, and its more targeted focus on mega-cap stocks -- specifically tech stocks -- could potentially lead to higher returns.
Glossary
ETF (Exchange-Traded Fund): An investment fund traded on stock exchanges, holding a basket of assets like stocks or bonds.
Expense ratio: The annual fee, as a percentage of assets, that a fund charges to cover operating costs.
Liquidity: How easily an asset or security can be bought or sold in the market without affecting its price.
Dividend yield: Annual dividends paid by a fund or stock divided by its current price, expressed as a percentage.
Beta: A measure of an investment's volatility compared to the overall market, typically the S&P 500.
AUM (Assets Under Management): The total market value of assets that a fund manages on behalf of investors.
Max drawdown: The largest observed loss from a fund's peak value to its lowest point over a specific period.
Growth of $1,000 over 5 years: The total value a $1,000 investment would reach after five years, including returns.
Sector exposure: The proportion of a fund's assets invested in specific industry sectors, such as technology or healthcare.
Holdings: The individual securities, such as stocks or bonds, owned by a fund.
Concentrated exposures: When a fund invests a larger portion of its assets in fewer securities, increasing potential risk and reward.
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Katie Brockman has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Apple, Microsoft, and Nvidia. The Motley Fool recommends the following options: long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft. The Motley Fool has a disclosure policy.
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