Vanguard vs. SPDR: Which Mega-Cap ETF Is a Better Buy, MGK or DIA?

The Vanguard Mega Cap Growth ETF (NYSEMKT:MGK) and the SPDR Dow Jones Industrial Average ETF Trust (NYSEMKT:DIA) differ sharply in sector focus, yield, cost, and risk profile, making each more suitable for different investor preferences.

Both MGK and DIA track large, well-known U.S. stocks. Yet, their approaches diverge: MGK targets the biggest growth companies, especially in technology, while DIA follows the iconic Dow Jones Industrial Average, emphasizing established blue chip names across more sectors. This analysis compares their cost, yield, performance, risk, and portfolio makeup to help investors align with their goals.

Snapshot (cost & size)

The one-year return represents total return over the trailing 12 months.

MGK is more affordable on fees, charging less than half the expense ratio of DIA, but DIA may appeal to income-focused investors with its higher dividend yield.

Performance & risk comparison

What's inside

DIA tracks the Dow Jones Industrial Average, holding 30 blue chip stocks with a tilt toward financial services (28%), technology (20%), and industrials (15%). Its largest positions are Goldman Sachs, Caterpillar, and Microsoft. With 28 years of trading history, DIA offers concentrated exposure to established U.S. companies and has no structural quirks or leverage resets.

MGK, by contrast, is dominated by technology (70%), with smaller allocations to consumer cyclicals and healthcare. Its 69 holdings include Apple, Nvidia, and Microsoft as top weights, resulting in a more growth-oriented and tech-heavy portfolio than DIA. MGK does not track the Dow, instead following the CRSP U.S. Mega Cap Growth Index.

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What this means for investors

First things first, I think both of these mega-cap ETFs are excellent options for investors. However, anyone interested in gaining access to some of the market's biggest names through these ETFs needs to be aware of their stark differences. If the world of leading-edge technology isn't your cup of tea -- or if you think the Magnificent Seven's run can't last forever -- MGK may not be for you. The Magnificent Seven account for nearly 60% of the ETF's holdings, so you need to be comfortable holding these stocks before buying.

Meanwhile, DIA keeps this mega-cap stock focus, but spreads its bets across industries, holding the 30 stocks in the Dow Jones Industrial Average. Despite having half as many stocks, DIA is much better diversified than its peer, which is reflected in its below-market beta of 0.89 and much smaller five-year drawdown. Furthermore, DIA offers a four times higher dividend yield and has increased its payouts more over the last decade. Last but not least, DIA's holdings trade at 24 times earnings, compared to MGK's lofty mark of 41 times earnings.

Ultimately, this all comes down to what each individual investor is comfortable holding. MGK probably offers more outperformance potential thanks to holding the most dominant stocks of our generation, which look poised to continue rocketing higher thanks to the rise of AI. However, it is also more expensive valuation-wise, less diversified, riskier, and offers a smaller dividend yield. Personally, I'd lean toward DIA, simply because I already own many of the Magnificent Seven names in MGK.

Josh Kohn-Lindquist has positions in Nvidia. The Motley Fool has positions in and recommends Apple, Goldman Sachs Group, 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.