Which Growth ETF Is the Better Long-Term Buy: Vanguard's Mega Cap MGK or Invesco's Small-Cap RZG?

Vanguard Morningstar Mega Cap Growth ETF maintains a significant cost advantage with a 0.05% expense ratio.

Invesco S&P SmallCap 600 Revenue ETF has delivered higher 1-year total returns but experienced a deeper maximum drawdown over the last five years.

The Vanguard fund is heavily concentrated in the technology sector, while the Invesco fund emphasizes healthcare and industrial companies.

The Vanguard Morningstar Mega Cap Growth ETF (NYSEMKT:MGK) offers a low-cost, technology-heavy approach to the largest U.S. companies, while the Invesco S&P SmallCap 600 Revenue ETF (NYSEMKT:RZG) provides targeted exposure to small-cap growth stocks.

These two exchange-traded funds occupy different corners of the market-capitalization spectrum. The Vanguard Morningstar Mega Cap Growth ETF tracks the giants of the domestic market, focusing on firms with the highest growth potential among mega-cap stocks. Conversely, the Invesco S&P SmallCap 600 Revenue ETF looks at smaller companies within the S&P 600 that exhibit strong growth characteristics.

Beta measures price volatility relative to the S&P 500; beta is calculated from monthly returns over the available fund history (up to five years). The 1-yr return represents total return over the trailing 12 months. Dividend yield is the trailing-12-month distribution yield.

The Vanguard fund is substantially more affordable, sporting an expense ratio of 0.05% compared to 0.35% for the Invesco fund. Over time, this 30-basis-point gap can significantly impact total returns. Both funds offer modest dividend yields below 1%.

The Vanguard Morningstar Mega Cap Growth ETF provides concentrated exposure to the largest growth-oriented companies in the U.S. market. Its sector weightings are dominated by Technology at 59%, followed by Communication Services at 16% and Consumer Cyclical at 11%. Its largest positions include Nvidia (NASDAQ:NVDA) at 13.24%, Apple (NASDAQ:AAPL) at 12.14%, and Microsoft (NASDAQ:MSFT) at 7.49%. The fund holds 69 stocks in total. The fund was launched in 2007. Vanguard Morningstar Mega Cap Growth ETF has paid $0.29 per share over the trailing 12 months, which on its recent ~$90.01 share price works out to a 0.3% yield.