S&P 500 Stability vs. Mega-Cap Growth: How Invesco's RSP Compares to Vanguard's MGK

The Vanguard Mega Cap Growth ETF (NYSEMKT:MGK) and the Invesco S&P 500 Equal Weight ETF (NYSEMKT:RSP) are large, index-based U.S. equity exchange-traded funds (ETFs), but their approaches diverge sharply: MGK focuses on the largest growth stocks, while RSP holds equal-weighted positions across the entire S&P 500.

This comparison looks at cost, yield, performance, risk, and portfolio construction to help investors identify which may better fit their needs.

Snapshot (cost & size)

Beta measures price volatility relative to the S&P 500. The 1-yr return represents total return over the trailing 12 months.

MGK is more affordable on fees, charging a much lower expense ratio. However, RSP may appeal to income-focused investors due to its substantially higher dividend yield.

Performance & risk comparison

What's inside

RSP tracks the S&P 500 Equal Weight Index, giving each constituent roughly identical weighting. This approach results in broad diversification across 504 holdings, with sector allocations spread among technology (16%), industrials (15%), and financial services (14%).

No single company dominates, and all of its holdings each represent less than 0.3% of assets. The fund’s nearly 23-year history underscores its established track record, with no leverage, currency hedges, or environmental, social, and governance (ESG) overlays.

By contrast, MGK homes in on mega-cap growth, allocating 56% of assets to technology, 16% to communication services, and 12% to consumer cyclicals. The portfolio is much more top-heavy, with Apple, Nvidia, and Microsoft combined making up over one-third of assets. This tilt results in less diversification but more exposure to large-cap tech stocks.

For more guidance on ETF investing, check out the full guide at this link.

What this means for investors

RSP and MGK can both be fantastic investments, but they take starkly different approaches to appeal to different types of investors.

RSP tracks the S&P 500, containing all of the stocks within the index. However, it's an equal-weighted fund, meaning all stocks make up roughly the same proportion of the portfolio. This can help reduce risk, because no single stock or industry can significantly sway the ETF's overall performance.

MGK, on the other hand, contains only 66 holdings, all of which are mega-cap growth stocks. That not only limits its diversification, but its heavy tilt toward the tech industry can also be a double-edged sword.

Tech stocks can experience lucrative returns, setting MGK up for more substantial growth. They can also be more volatile, however, as seen with this fund's much steeper max drawdown and higher beta, signifying larger price swings.

When it comes to choosing between these two ETFs, the decision will largely come down to your goals and risk tolerance. RSP is the more stable option, offering more diversification and aiming to mitigate risk. The downside, though, is that it's also limited in its earnings. While MGK is the more volatile of the two, it has a solid track record of outperforming RSP in both 12-month and five-year total returns.

Glossary

ETF (Exchange-Traded Fund): A fund holding a basket of securities that trades on an exchange like a stock.
Index-based ETF: An ETF designed to track the performance of a specific market index, not to beat it.
Expense ratio: Annual fund operating costs expressed as a percentage of the fund’s average assets.
Dividend yield: Annual dividends paid by a fund or stock divided by its current market price.
Beta: A measure of how volatile an investment is compared with the overall stock market.
Max drawdown: The largest peak-to-trough decline in an investment’s value over a specific period.
Total return: Investment performance including price changes plus all dividends and distributions, assuming they are reinvested.
Equal weight index: An index where each constituent stock is given the same weighting, regardless of company size.
Sector allocation: How a fund’s assets are distributed across different industries, such as technology or healthcare.
Growth of $1,000: Illustration showing how a $1,000 investment would have increased or decreased over time.
AUM (Assets Under Management): The total market value of all assets managed within a fund.
Leverage (in funds): Using borrowed money or derivatives to increase a fund’s exposure beyond its net assets.

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.