The Second-Best Performing Vanguard ETF Over the Last Decade Is Issuing a 5-For-1 Stock Split. Here’s Why It’s a Screaming Buy in April.
Investment management firm Vanguard has announced share splits for five of its most popular equity index exchange-traded funds (ETFs) — including the Vanguard Mega Cap Growth ETF(NYSEMKT: MGK).
Effective April 21, the ETF will be undergoing a 5-for-1 stock split “to widen availability for investors by keeping share prices within accessible trading ranges.” The split will quintuple the number of outstanding shares while reducing the share price to a split-adjusted level around $70 — based on the price at the time of this writing.
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Here’s why the Mega Cap Growth ETF is one of the best ETFs for growth investors to buy in April.
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The Mega Cap Growth ETF has averaged an 18.3% annual return over the past 10 years, ranking second only to the Vanguard Information Technology ETF among Vanguard’s 65 equity ETFs in that period.
The price of admission to unlock those gains has been volatility. Over the last decade, the fund has endured two drawdowns of at least 20% — in December 2018 and April 2025 — as well as two drawdowns of over 30% in March 2020 and December 2022.
At the time of this writing, the ETF is down 17% from its all-time high achieved in October 2025. If the fund breaks below a 20% drawdown, that would mean it has suffered essentially five bear markets in less than eight years.
But despite all of those sell-offs, the fund has still crushed the S&P 500 over the last decade — showcasing the power of long-term compounding for patient investors.
The Mega Cap Growth ETF is volatile by design. It’s a concentrated bet on a handful of mega-cap growth stocks continuing to drive the major index to new heights. The 10 largest holdings in the ETF — Nvidia, Apple, Alphabet, Microsoft, Amazon, Meta Platforms, Tesla, Broadcom, Eli Lilly, and Visa — make up a staggering 67.7% of the fund.
For context, the 10 largest S&P 500 components make up 37.9% of the index. So if these companies are outperforming the S&P 500, chances are the Mega Cap Growth ETF will produce outsized gains. This is exactly what happened over the last decade. But the concentration can amplify losses during a market downturn.
For the Vanguard Mega Cap Growth ETF to continue outperforming the S&P 500 over the long term, earnings growth rates have to justify the valuations of its top holdings. And when valuations come down, as they are now, it becomes easier for companies to exceed expectations.
The Mega Cap Growth ETF now sports a price-to-earnings (P/E) ratio of 31.1 — compared to 25.1 P/E of the Vanguard S&P 500 ETF. So a basket of top mega cap growth stocks still trades at a premium to the S&P 500, but not by nearly as much as a few months ago.
Some investors are uncertain about the payoff from capital-intensive artificial intelligence (AI) spending, weakening consumer spending, geopolitical tensions, and the inflationary pressures of rising oil prices. All of those risks are worth considering before buying growth stocks. But investors with a long-term time horizon are getting a compelling opportunity to buy the Mega Cap Growth ETF in April for its lowest price since June of last year.
The stock split will allow investors to scoop up a full share of the ETF at a lower price. And with a mere 0.05% expense ratio, the fund offers a low-cost way to bet big on top U.S. growth stocks without racking up a lot of fees.
Despite its redeeming qualities, the growth stock ETF is best suited for risk-tolerant investors who can stomach volatility. Before buying the ETF, it’s worth conducting a portfolio review to ensure you’re OK with potentially duplicating holdings — especially if you already have sizable positions in some of the largest technology companies by market value.
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Daniel Foelber has positions in Nvidia. The Motley Fool has positions in and recommends Alphabet, Amazon, Apple, Meta Platforms, Microsoft, Nvidia, Tesla, Vanguard S&P 500 ETF, and Visa and is short shares of Apple. The Motley Fool recommends Broadcom. The Motley Fool has a disclosure policy.
