The Vanguard Mega Cap Growth ETF (MGK) contains 66 of the largest American companies on the market.
MGK's top three holdings account for over 38% of the ETF.
There is a lot of overlap between MGK and other major indexes, like the S&P 500 and Nasdaq Composite.
A company's market cap is found by multiplying its stock price by its number of outstanding shares. Typically, stocks fall into the following three categories: small-cap, mid-cap, or large-cap. However, some stocks' valuations have increased so much that a new category has emerged: mega-cap.
The Vanguard Mega Cap Growth ETF (NYSEMKT: MGK) holds 66 of the largest American companies and has been one of the best-performing ETFs over the past decade. In that time, it's up close to 380%, meaning a $1,000 investment made 10 years ago would be worth around $4,800 today.
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MGK data by YCharts
Although MGK contains 66 stocks, a few mega-cap tech stocks have been doing the heavy lifting, especially over the past few years, with the artificial intelligence (AI) boom. MGK's top 10 holdings account for 65% of the ETF, with its top three holdings -- Nvidia, Apple, and Microsoft -- accounting for over 38% by themselves.
This high concentration of tech stocks has worked wonders for MGK, as they have been among the best-performing stocks over the past decade. The three stocks mentioned above are up above 23,000%, 840%, and 804%, respectively, in that time span (through Nov. 27).
I'd caution against making MGK a large portion of your portfolio because of its concentration and overlap with other major indexes like the S&P 500 and the Nasdaq Composite. However, it can be a good complementary piece for people wanting exposure to mega-cap growth stocks.
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Stefon Walters has positions in Apple and Microsoft. 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.