Is This Low-Cost Megacap ETF a No-Brainer Buy for the Long Haul?

• The Vanguard Mega Cap Growth ETF's vulnerability to tech has paid disconnected with stellar returns.

• It has routinely outperformed the marketplace by focusing connected the largest maturation stocks successful the world.

• The ETF charges debased fees, making it an charismatic enactment for investors to clasp implicit the agelong haul.

• 10 stocks we similar amended than Vanguard World Fund - Vanguard Mega Cap Growth ETF ›

Investing successful ample and established businesses tin beryllium a large mode to assistance support your portfolio successful the agelong run. And one mode you tin execute this is by investing successful megacap stocks, which person marketplace caps successful excess of $200 billion. Not lone are they established, but with valuations that high, they're besides apt well-known to the mean investor.

There's a increasing fig of megacap stocks, and you tin summation vulnerability to them done an exchange-traded money (ETF). The Vanguard Mega Cap Growth ETF (NYSEMKT: MGK) focuses connected these types of stocks and has been outperforming the marketplace this year. Plus, it has an highly debased disbursal ratio of conscionable 0.07%.

Could this ETF beryllium a no-brainer bargain for your portfolio today? 

Tech stocks are among the astir invaluable successful the world, truthful it should travel arsenic small astonishment that they besides instrumentality up the immense bulk of the fund's portfolio. These types of stocks marque up conscionable nether 70% of the megacap fund, and this dense tilt whitethorn not entreaty to risk-averse investors.

Tech stocks, however, person been soaring successful caller years owed to artificial quality (AI) and the related hype astir it. Besides tech, the lone different assemblage successful treble digits successful this exchange-traded money (ETF) is user discretionary, which makes up astir 16% of its holdings.

One happening investors should beryllium comfy with is that the fund's apical 3 holdings are large names successful tech -- Nvidia, Apple, and Microsoft. Together, they marque up implicit 38% of the ETF's portfolio.

How they execute volition person a important interaction connected however the wide money does. There are 66 stocks successful the ETF, but fixed its dense absorption connected tech, it whitethorn not look arsenic divers arsenic it seems astatine archetypal glance.

While each that vulnerability to tech whitethorn look concerning, the world is that it's much than paid disconnected for investors. Tech stocks get a batch of attraction erstwhile they're doing well, and maturation investors gravitate toward companies with cutting-edge technologies.

This year, the ETF is up 18%, portion the S&P 500 has risen by conscionable 13% (returns arsenic of Nov. 17). Including this year, the money has outperformed the broader scale successful 8 of the past 9 years, going backmost to 2017. The lone blemish was successful 2022, erstwhile determination was a wide sell-off successful the tech sector. That year, the money fell by 34%, which was acold worse than the S&P 500's much humble diminution of 19%.