Meet the Spectacular Vanguard ETF With 44.6% of Its Portfolio Parked in Nvidia, Alphabet, Apple, and Microsoft

The Vanguard Morningstar Mega Cap Growth ETF (MGK) is an exchange-traded fund that mirrors the Large Cap Growth index by investing in the same stocks. Currently, four of the 52 largest members of the Mega Cap Growth index - Nvidia, Alphabet, Apple, and Microsoft - account for a remarkable 44.6% of the ETF's portfolio value. These four tech giants have a combined market capitalization of $17.6 trillion and have delivered a stunning 195% return since the AI boom began in January 2023.

The ETF also holds other AI leaders like Meta Platforms, Broadcom, Amazon, Advanced Micro Devices, and Palantir Technologies. To diversify further, it includes positions in Visa, Mastercard, Boeing, and Monster Energy. Over the past 13 years, the Vanguard ETF has achieved a compound annual return of 13.8%, outperforming the S&P 500's average of 10.9% per year.

However, with its concentrated portfolio of just 52 stocks, investors should consider adding this ETF to a diversified portfolio of other funds and individual stocks to minimize potential downside risks.