Vanguard ETFs: The Slightly Less Terrible Choice

by

Right, so we’re looking at two Vanguard ETFs, the Vanguard Mega Cap Growth ETF (MGK +0.63%) and the Vanguard Russell 1000 Growth ETF (VONG +0.43%). Now, before you start picturing yachts and early retirement, let’s be clear: these aren’t get-rich-quick schemes. They’re more like…slowly-accumulate-a-decent-retirement-if-the-market-doesn’t-collapse schemes. And in my experience, that’s a big ‘if’. But hey, someone has to buy the dips, right? I mean, it’s not like I want to be left holding the bag when the robots finally decide we’re obsolete.

Both of these funds chase the same dream: large-cap growth stocks. They’re like two pigeons competing for the same crumb of a very large, potentially poisoned, baguette. VONG tracks the Russell 1000 Growth Index, while MGK follows the CRSP US Mega Cap Growth Index. Sounds thrilling, doesn’t it? It’s like watching paint dry, but with more paperwork. The difference, as we’ll see, is subtle, like the difference between a slightly overcooked and a perfectly cooked goose.

Snapshot (Cost & Size – Because Numbers Are Important, Apparently)

Metric VONG MGK
Issuer Vanguard Vanguard
Expense ratio 0.07% 0.07%
1-yr return (as of 2026-01-23) 12.2% 14.6%
Dividend yield 0.5% 0.4%
AUM $44.8 billion $32.5 billion

Now, don’t get excited about that 1-yr return. Past performance is no guarantee of future results. I repeat: no guarantee. It’s like saying a magician always pulls a rabbit out of a hat. Sometimes it’s a pigeon, sometimes it’s just an empty hat. And that dividend yield? Don’t go booking that cruise just yet. It’s barely enough to cover the cost of a decent cup of coffee. A good cup, mind you.

Performance & Risk Comparison (Or, How Much Could You Lose?)

Metric VONG MGK
Max drawdown (5 y) (32.72%) (36.01%)
Growth of $1,000 over 5 years $1,878 $1,940

See? Both of them can lose a significant chunk of your money. That drawdown figure? That’s the polite way of saying “you could have lost over a third of your investment.” But hey, $1,940 is more than $1,878, right? It’s like choosing between a slightly less soggy biscuit and a slightly more soggy biscuit. The difference is negligible, but I’m a contrarian, so I’ll take the biscuit that everyone else is avoiding. Why? Because reasons.

What’s Inside (The Guts of the Beast)

MGK is all about the tech giants. 70% in technology, 12% in consumer cyclicals, and 6% in healthcare. It’s like putting all your eggs in one very shiny, silicon-based basket. The top three holdings? NVIDIA, Apple, and Microsoft. Shocking, I know. It’s as if everyone else is also betting on the same companies. The fund holds just 69 companies. That’s less than the number of times I’ve had to explain the concept of diversification to eager investors.

VONG, on the other hand, is a bit more spread out. 394 holdings, with 53% in tech, 13% in consumer cyclicals, and 13% in communication services. Still heavily tech-focused, but at least they’re trying to pretend they’re diversified. It’s like a magician with a slightly larger hat. The top three? NVIDIA, Apple, and Microsoft. See a pattern here? These companies are so big, they’re practically unavoidable. It’s like trying to avoid pigeons in Trafalgar Square.

For more guidance on ETF investing, check out the full guide at this link. (I haven’t read it, so don’t blame me if it’s terrible.)

What This Means for Investors (Or, How to Lose Money Slowly)

MGK is for those who are convinced that AI is going to solve all our problems and make us all fabulously wealthy. It’s a high-risk, high-reward play. It’s like betting on a horse with a questionable pedigree and a penchant for tripping. VONG is for those who want growth but also prefer a slightly more stable path. It’s like betting on a slightly less questionable horse.

Look, both of these funds are perfectly adequate ways to throw money at the stock market. But don’t expect miracles. And remember, the best investment is always the one you understand. And frankly, I don’t understand any of this. I just like pointing out the inherent absurdity of it all. Now, if you’ll excuse me, I’m going to go find a pigeon to argue with.

Read More

2026-01-24 18:53