VOO vs. MGK: A Comedy of Financial Errors

by

In the grand theatre of finance, two protagonists-Vanguard Mega Cap Growth ETF (MGK) and Vanguard S&P 500 ETF (VOO)-take the stage, each vying for the investor’s purse with promises of prosperity. One, a sprightly dancer in the spotlight of growth stocks; the other, a stately gentleman in the tailored coat of broad-market stability. Let us dissect their wares with the precision of a surgeon and the wit of a poet.

Act I: The Ledger of Expenses

Metric MGK VOO
Issuer Vanguard Vanguard
Expense ratio 0.07% 0.03%
1-yr return (as of Dec. 18, 2025) 14.12% 11.98%
Dividend yield 0.37% 1.12%
Beta (5Y monthly) 1.24 1.00
AUM $32.7 billion $1.5 trillion

VOO, the elder statesman, charges a modest fee and offers a more generous dividend, akin to a nobleman who shares his wine. MGK, the ambitious upstart, demands more of your coin but dangles the bauble of higher returns. A delicate dance of cost and reward, where prudence and avarice waltz in tandem.

Act II: The Tempest of Returns

Metric MGK VOO
Max drawdown (5 y) -36.02% -24.53%
Growth of $1,000 over 5 years $2,017 $1,819

Act III: The Cast of Characters

VOO, with 505 performers in its ensemble, mirrors the S&P 500’s grand mosaic. Its leading players-Nvidia, Apple, and Microsoft-shine without monopolizing the stage. Technology, the reigning monarch, holds 37% of the crown, while financial services and consumer cyclicals jostle for the remaining courtly favor.

MGK, by contrast, is a soliloquy of six actors, each a titan of technology (58%), communication services (15%), and consumer cyclicals (12%). Its top trio, though identical to VOO’s, dominate the narrative, their influence swelling like a crescendo. A thrilling spectacle when the curtain rises, a perilous fall when the lights dim.

Advertisement

For further enlightenment on this financial masquerade, consult the full guide at this link.

Curtain Call: The Investor’s Dilemma

VOO, the prudent baron, offers diversification and stability, its 505 holdings a bulwark against tempests. MGK, the reckless dandy, bets the farm on a few stars, trading security for the allure of meteoric ascent. Both share the same triumvirate of champions, yet MGK’s 38% stake in them renders it more susceptible to their fates, while VOO’s 22% bet cushions it from the same tides.

Behold, then: MGK’s higher beta and steeper drawdowns are the price of its audacity, a gamble for those who crave the thrill of the market’s rollercoaster. VOO, meanwhile, offers the gentle lapping of long-term waves, a refuge for the cautious soul. In this farcical interplay of risk and reward, the investor must decide whether to dance in the spotlight or retreat to the wings.

Lexicon of the Stage

ETF: A pooled investment that parades across stock exchanges like a marionette.
Expense ratio: The annual toll, in percentage, exacted by a fund’s keep.
Dividend yield: The annual bounty of dividends, divided by the fund’s price, in percentage.
Beta: A measure of an investment’s volatility compared to the market’s heartbeat; 1.0 matches its pulse.
AUM: Assets under management; the total value of assets stewarded for investors.
Max drawdown: The deepest plunge from a fund’s peak to its trough, a tragic arc.
Total return: The investment’s price change plus all dividends, reinvested like a phoenix.
Sector allocation: The percentage of a fund’s assets invested in different industry troupes.
Growth stocks: Shares of companies expected to grow faster than the market’s average, often reinvesting profits instead of paying dividends.
Liquidity: How easily an asset can be bought or sold without ruffling its feathers.
Portfolio construction: The art of selecting and weighting assets to meet specific goals, a director’s vision.
Drawdown: A decline in investment value from a peak to a trough, a tragic interlude.

And so, dear reader, the curtain falls. Choose wisely, lest the stage collapse beneath your feet. 🎭

Read More

2025-12-21 16:29