Nvidia (NVDA) is a high-growth company benefiting from the surge in demand for artificial intelligence (AI). The company’s GPUs help power AI applications, from machine learning to data science. To invest in Nvidia, investors may consider these two ETFs: Vanguard Mega Cap Growth ETF (MGK) and Technology Select Sector SPDR Fund (XLK). Nvidia comprises over 10% of the total holdings in both ETFs, making them potential options for investors seeking exposure to this tech giant.
Let’s take a deeper look at these two ETFs.
Vanguard Mega Cap Growth ETF
The MGK ETF tracks the performance of a market-cap-weighted index that consists of large-cap U.S. growth stocks. This ETF provides exposure to a diversified portfolio of leading growth companies, including major players in technology, healthcare, and other high-growth sectors. Investors should note that this ETF tracks the CRSP U.S. Mega Cap Growth Index.
Importantly, NVDA constitutes 13.01% of the holdings in the MGK ETF. Overall, MGK ETF has $23.25 billion in assets under management (AUM), with the top 10 holdings contributing 63.35% of the portfolio. Additionally, it has a low expense ratio of 0.07%. The MGK ETF has returned 11.37% in the past three months.
Overall, the MGK ETF has a Strong Buy consensus rating. Of the 73 stocks held, 64 have Buys, and nine have a Hold rating. At $365.35, the average MGK ETF price target implies a 12.18% upside potential.
Technology Select Sector SPDR Fund
The XLK ETF tracks the technology sector of the S&P 500 Index (SPX). It provides exposure to several tech giants, including Apple (AAPL), Microsoft (MSFT), and Alphabet (GOOGL).
It is worth highlighting that Nvidia accounts for 14.23% of XLK’s total holdings. The XLK ETF has $69.14 billion in AUM and an expense ratio of 0.09%. Its top 10 holdings contribute 62.24% of the portfolio. Over the past six months, XLK ETF has generated a return of 11.74%.
On TipRanks, XLK has a Moderate Buy consensus rating based on 55 Buys and 16 Holds assigned in the last three months. At $253.05, the average XLK ETF price target implies an 11.53% upside potential.
Concluding Thoughts
ETFs provide a diversified way to invest in Nvidia, reducing risk compared to investing directly in the stock. Furthermore, ETFs are a low-cost, liquid, and transparent way to participate in the market. Investors seeking ETF recommendations might consider MGK and XLK, as these ETFs offer significant exposure to NVDA stock.
