Should Vanguard Mega Cap ETF (MGC) Be on Your Investing Radar?

The Vanguard Mega Cap ETF (MGC) was launched on 12/17/2007, and is a passively managed exchange traded fund designed to offer broad exposure to the Large Cap Blend segment of the US equity market.

The fund is sponsored by Vanguard. It has amassed assets over $6.34 billion, making it one of the largest ETFs attempting to match the Large Cap Blend segment of the US equity market.

Why Large Cap Blend

Large cap companies usually have a market capitalization above $10 billion. Considered a more stable option, large cap companies boast more predictable cash flows and are less volatile than their mid and small cap counterparts.

Blend ETFs usually hold a mix of growth and value stocks as well as stocks that exhibit both value and growth characteristics.

Costs

Since cheaper funds tend to produce better results than more expensive funds, assuming all other factors remain equal, it is important for investors to pay attention to an ETF's expense ratio.

Annual operating expenses for this ETF are 0.07%, making it one of the least expensive products in the space.

It has a 12-month trailing dividend yield of 1.21%.

Sector Exposure and Top Holdings

Even though ETFs offer diversified exposure which minimizes single stock risk, it is still important to look into a fund's holdings before investing. Luckily, most ETFs are very transparent products that disclose their holdings on a daily basis.

This ETF has heaviest allocation to the Information Technology sector--about 34.40% of the portfolio. Financials and Healthcare round out the top three.

Looking at individual holdings, Apple Inc (AAPL) accounts for about 8.65% of total assets, followed by Microsoft Corp (MSFT) and Nvidia Corp (NVDA).

The top 10 holdings account for about 39.26% of total assets under management.

Performance and Risk

MGC seeks to match the performance of the CRSP US Mega Cap Index before fees and expenses. The CRSP U.S. Mega Cap Index includes the largest U.S. companies, with a target of including the top 70% of investable market capitalization. The index includes securities traded on NYSE, NYSE Market, NASDAQ or ARCA.

The ETF has lost about -3.80% so far this year and it's up approximately 11.43% in the last one year (as of 05/09/2025). In the past 52-week period, it has traded between $179.23 and $222.69.

The ETF has a beta of 1.01 and standard deviation of 18.33% for the trailing three-year period, making it a medium risk choice in the space. With about 199 holdings, it effectively diversifies company-specific risk.

Alternatives

Vanguard Mega Cap ETF holds a Zacks ETF Rank of 2 (Buy), which is based on expected asset class return, expense ratio, and momentum, among other factors. Because of this, MGC is a great option for investors seeking exposure to the Style Box - Large Cap Blend segment of the market. There are other additional ETFs in the space that investors could consider as well.

The SPDR S&P 500 ETF (SPY) and the Vanguard S&P 500 ETF (VOO) track a similar index. While SPDR S&P 500 ETF has $581.69 billion in assets, Vanguard S&P 500 ETF has $621.47 billion. SPY has an expense ratio of 0.09% and VOO charges 0.03%.

Bottom-Line

While an excellent vehicle for long term investors, passively managed ETFs are a popular choice among institutional and retail investors due to their low costs, transparency, flexibility, and tax efficiency.

To learn more about this product and other ETFs, screen for products that match your investment objectives and read articles on latest developments in the ETF investing universe, please visit Zacks ETF Center.

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This article originally published on Zacks Investment Research (zacks.com).

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