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ETF Specialist

A Low-Cost Core Building Block ETF

While it may seem boring, slow and steady wins the race, as evidenced by this fund's 4-star status.

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How does a boring old index fund achieve 4-star status? While it won't deviate from the category average as much as an actively managed fund, it has all the features typically associated with success, including good stewardship, low fees, and stable performance. Vanguard Mega Cap Index 300 ETF (MGC) charges just 0.12% and offers index-based exposure to giant- and large-cap stocks. These stocks have become bargains, particularly when compared with more-volatile small caps and intermediate-term bonds.

MGC is an ideal core equity holding because of its low-cost, indexed-based approach. Its underlying stocks are widely diversified across both sectors and the value-growth spectrum. This fund is particularly well-suited for those seeking to precisely control their market-cap exposure, as it is designed to fit with  Vanguard Mid-Cap ETF (VO) and  Vanguard Small Cap ETF (VB) in order to cover the vast majority of the U.S. equities market with minimal holdings overlap.

Michael Rawson does not own (actual or beneficial) shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.

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