MGK ETF

The S&P 500 (SNPINDEX: ^GSPC) is coming off a total return of 25% in 2024, which was more than double its average annual gain of 10.5% dating back to when it was established in 1957. The strong result was driven by a group of technology giants dubbed the Magnificent Seven, which earned the title for their incredible size and ability to consistently outperform the broader market.

The stock market has been a rocket ship over the past two years. What is the main fuel powering the upward climb?

DeepSeek's impact on AI technology could negatively affect semiconductor stocks like Nvidia, but may benefit hyperscalers like Apple, Meta, and Amazon. MGK's heavy exposure to Nvidia poses a risk, but its diversified mega-cap growth strategy remains attractive with a low 0.07% expense ratio. MGK outperformed peers over the long term, but this trend has narrowed in the last year and more recently.

The term "Magnificent Seven" was coined by Wall Street in 2023 to describe a group of seven American technology stocks that consistently outperformed the rest of the market. The group remained a dominant force in 2024, delivering an average return of 60.1% for the year:

Launched on 12/17/2007, the Vanguard Mega Cap Growth ETF (MGK) is a passively managed exchange traded fund designed to provide a broad exposure to the Large Cap Growth segment of the US equity market.

Exchange-traded funds (ETFs) have become a popular investing instrument over the last few years. They provide easy and instant access to diversified holdings, they're easy to buy and sell on the market, and they usually have low fees.

Vanguard's MGK delivers hyper-growth with a 15% annual return potential, all while trading at a 15% discount to fair value. With a concentrated portfolio of the world's best mega-cap growth stocks, MGK offers Buffett-style “excellence” without stock picking. The ETF's 75 holdings boast an average 46% free cash flow margin and 37% return on invested capital, signaling unmatched quality.

Holiday cheer is in the market air, with the broader indexes making new all-time highs seemingly every day. But there was little to be merry about this time two years ago when many top growth stocks were performing terribly.

Vanguard Mega Cap Growth Index Fund ETF Shares, with a low expense ratio of 0.07%, offers exposure to 70 top growth-oriented mega-cap stocks. The fund's advanced methodology, focusing on EPS growth and return on assets, results in a concentrated portfolio with impressive performance. Despite higher risks, as evidenced by a -33% drawdown in 2022, MGK's superior CAGR and solid Sharpe and Sortino ratios make it rewarding.