The Vanguard Mega Cap Growth ETF (NYSEMKT:MGK) and the State Street SPDR S&P 500 ETF Trust (NYSEMKT:SPY) are two popular exchange-traded funds that provide exposure to some of the largest companies in the market. While SPY tracks the S&P 500 Index, offering broad coverage of U.S. large-cap stocks, MGK focuses on U.S. mega-cap growth companies, resulting in different sector allocations, historical risk profiles, and yield characteristics for investors seeking growth versus stability.
Comparing the two ETFs, SPY is managed by SPDR and has an expense ratio of 0.09%, while MGK, managed by Vanguard, has a slightly lower expense ratio of 0.07%. In terms of performance, as of February 3, 2026, SPY had a 1-year return of 14.38% with a dividend yield of 1.07%, compared to MGK’s 1-year return of 14.27% and a lower dividend yield of 0.35%. SPY boasts an AUM of $712 billion, significantly higher than MGK’s $32 billion. Additionally, SPY has a beta of 1.00, while MGK’s beta is slightly higher at 1.20.
MGK has shown slightly stronger growth over the past five years, with a growth of $1,000 reaching $1,892 compared to SPY’s $1,805. However, MGK also exhibited a deeper max drawdown of -36.02% compared to SPY’s -24.50%, highlighting its higher volatility and drawdown risk.
In terms of portfolio composition, MGK focuses on U.S. mega-cap growth stocks, with a heavy emphasis on technology (55%), followed by communication services (17%) and consumer cyclical (13%). The fund holds 60 stocks, with top positions including Nvidia, Apple, and Microsoft. On the other hand, SPY tracks the S&P 500, offering broader diversification with around 35% allocated to tech, 13% to financial services, and 11% to communication services. SPY’s top positions align with MGK’s but with lower individual weightings.
Investors seeking passive dividend income may find SPY’s higher dividend yield appealing, while those looking for targeted growth opportunities may prefer MGK’s narrower focus. Growth ETFs like MGK have the potential for higher returns but also come with greater price volatility, as evidenced by its higher beta and deeper drawdown.
Ultimately, the choice between SPY and MGK depends on investors’ goals and risk tolerance. SPY offers greater diversification and stability with exposure to a wide range of large-cap stocks, while MGK’s targeted approach may lead to higher returns over time. Before investing in the Vanguard Mega Cap Growth ETF or the State Street SPDR S&P 500 ETF Trust, investors should carefully consider their investment objectives and risk tolerance.
For more information on ETF investing, consider checking out the full guide at this link. Both SPY and MGK can be excellent investments depending on individual preferences and financial goals.
