MGK Owns Today's Winners. SLYG Is Betting on Tomorrow's.
Key Points
Vanguard Mega Cap Growth ETF provides exposure to the largest U.S. growth companies with a significantly lower expense ratio than State Street SPDR S&P 600 Small Cap Growth ETF.
State Street SPDR S&P 600 Small Cap Growth ETF maintains a more diversified portfolio of 344 holdings compared to the 69 positions in Vanguard Mega Cap Growth ETF.
Vanguard Mega Cap Growth ETF has delivered higher 5-year total returns but experienced a deeper maximum drawdown during the same period.
- 10 stocks we like better than Vanguard Mega Cap Growth ETF ›
The primary difference between State Street SPDR S&P 600 Small Cap Growth ETF (NYSEMKT:SLYG) and Vanguard Mega Cap Growth ETF (NYSEMKT:MGK) is the size of the underlying companies they target.
Investors often use these funds to isolate specific market tiers. While the State Street fund tracks small-cap companies with high growth characteristics, the Vanguard fund focuses on the largest mega-cap firms in the U.S. market. This difference in market capitalization results in distinct sector exposures, volatility profiles, and historical performance for each fund.
Snapshot (cost & size)
| Metric | SLYG | MGK |
|---|---|---|
| Issuer | SPDR | Vanguard |
| Expense ratio | 0.15% | 0.05% |
| 1-yr return (as of June 1, 2026) | 27.80% | 34.10% |
| Dividend yield | 0.70% | 1.30% |
| Beta | 1.06 | 1.23 |
| AUM | $4.7 billion | $32.0 billion |
Beta measures price volatility relative to the S&P 500; beta is calculated from five-year monthly returns. The 1-yr return represents total return over the trailing 12 months. Dividend yield is the trailing-12-month distribution yield.
The Vanguard fund is the more affordable option with an expense ratio of 0.05%, compared to 0.15% for the State Street fund. Additionally, the Vanguard fund offers a higher trailing distribution yield of 1.30%, while the State Street fund paid 0.70% over the last 12 months.
Performance & risk comparison
| Metric | SLYG | MGK |
|---|---|---|
| Max drawdown (5 yr) | (29.20%) | (36.00%) |
| Growth of $1,000 over 5 years (total return) | $1,300 | $2,162 |
What's inside
The Vanguard Mega Cap Growth ETF focuses heavily on the technology sector, which accounts for 56.12% of the portfolio, followed by communication services at 17.12% and consumer cyclical at 13.12%. It holds 69 stocks, and its largest positions include Nvidia (NASDAQ:NVDA) at 13.77%, Apple (NASDAQ:AAPL) at 11.79%, and Microsoft (NASDAQ:MSFT) at 8.69%. This fund was launched in 2007 and has a trailing-12-month dividend of $1.18 per share.
The State Street SPDR S&P 600 Small Cap Growth ETF offers broader diversification with 344 holdings, led by technology at 20.12%, industrials at 19.12%, and healthcare at 14.12%. Its largest positions include Sanmina (NASDAQ:SANM) at 1.69%, Viasat (NASDAQ:VSAT) at 1.39%, and Viavi Solutions (NASDAQ:VIAV) at 1.32%. The company launched the fund in 2000, and it has a trailing-12-month dividend of $0.77 per share.
For more guidance on ETF investing, check out the full guide at this link.
What this means for investors
Megacap growth stocks like Nvidia and Microsoft have dominated the past decade, powered by the rise of artificial intelligence and the compounding advantages of scale. But that dominance comes with concentration risk that many investors underestimate. When just five companies drive the majority of a fund's returns, a single sector rotation or regulatory shift can undo years of gains quickly.
Small-cap growth stocks offer investors a different proposition. They are more sensitive to domestic economic conditions, more volatile, and less insulated from rising costs, but they also carry more room to grow and tend to outperform in periods of broad economic expansion and falling interest rates.
Choosing between these funds is really a question about which part of the market you trust most right now. MGK is the higher-conviction, lower-cost bet on continued megacap technology leadership. SLYG offers broader diversification across hundreds of smaller companies with a profitability screen that filters out the weakest names. For investors who already hold significant large-cap exposure, SLYG broadens the growth story beyond the companies already dominating most portfolios.
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Sara Appino has positions in Apple and Nvidia. The Motley Fool has positions in and recommends Apple, Microsoft, Nvidia, and Viavi Solutions. The Motley Fool has a disclosure policy.
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