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BSV vs. MTUM: What’s The Difference?

The Vanguard Short-Term Bond Index Fund ETF Shares (BSV) and the iShares MSCI USA Momentum Factor ETF (MTUM) are both among the Top 100 ETFs. BSV is a Vanguard Short-Term Bond fund and MTUM is a iShares Large Growth fund. So, what’s the difference between BSV and MTUM? And which fund is better?

The expense ratio of BSV is 0.10 percentage points lower than MTUM’s (0.05% vs. 0.15%). BSV is mostly comprised of AAA bonds while MTUM has a high exposure to the financial services sector. Overall, BSV has provided lower returns than MTUM over the past ten years.

In this article, we’ll compare BSV vs. MTUM. We’ll look at risk metrics and holdings, as well as at their annual returns and industry exposure. Moreover, I’ll also discuss BSV’s and MTUM’s fund composition, performance, and portfolio growth and examine how these affect their overall returns.

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Summary

BSVMTUM
NameVanguard Short-Term Bond Index Fund ETF SharesiShares MSCI USA Momentum Factor ETF
CategoryShort-Term BondLarge Growth
IssuerVanguardiShares
AUM67.71B14.53B
Avg. Return2.27%17.37%
Div. Yield1.48%0.44%
Expense Ratio0.05%0.15%

The Vanguard Short-Term Bond Index Fund ETF Shares (BSV) is a Short-Term Bond fund that is issued by Vanguard. It currently has 67.71B total assets under management and has yielded an average annual return of 2.27% over the past 10 years. The fund has a dividend yield of 1.48% with an expense ratio of 0.05%.

The iShares MSCI USA Momentum Factor ETF (MTUM) is a Large Growth fund that is issued by iShares. It currently has 14.53B total assets under management and has yielded an average annual return of 17.37% over the past 10 years. The fund has a dividend yield of 0.44% with an expense ratio of 0.15%.

BSV’s dividend yield is 1.04% higher than that of MTUM (1.48% vs. 0.44%). Also, BSV yielded on average 15.10% less per year over the past decade (2.27% vs. 17.37%). The expense ratio of BSV is 0.10 percentage points lower than MTUM’s (0.05% vs. 0.15%).

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Fund Composition

Holdings

BSV - Holdings

BSV Bond SectorsWeight
AAA71.65%
BBB13.08%
A11.95%
AA3.28%
Others0.03%
Below B0.01%
B0.0%
BB0.0%
US Government0.0%

BSV’s Top Bond Sectors are ratings of AAA, BBB, A, AA, and Others at 71.65%, 13.08%, 11.95%, 3.28%, and 0.03%. The fund is less weighted towards Below B (0.01%), B (0.0%), and BB (0.0%) rated bonds.

MTUM - Holdings

MTUM HoldingsWeight
Tesla Inc5.63%
The Walt Disney Co4.39%
JPMorgan Chase & Co4.35%
Berkshire Hathaway Inc Class B4.34%
Bank of America Corp3.81%
PayPal Holdings Inc3.76%
Wells Fargo & Co3.05%
Applied Materials Inc3.05%
Moderna Inc2.89%
Alphabet Inc Class C2.84%

MTUM’s Top Holdings are Tesla Inc, The Walt Disney Co, JPMorgan Chase & Co, Berkshire Hathaway Inc Class B, and Bank of America Corp at 5.63%, 4.39%, 4.35%, 4.34%, and 3.81%.

PayPal Holdings Inc (3.76%), Wells Fargo & Co (3.05%), and Applied Materials Inc (3.05%) have a slightly smaller but still significant weight. Moderna Inc and Alphabet Inc Class C are also represented in the MTUM’s holdings at 2.89% and 2.84%.

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Risk Analysis

BSVMTUM
Mean Return0.160
R-squared78.380
Std. Deviation1.330
Alpha0.210
Beta0.380
Sharpe Ratio0.980
Treynor Ratio3.330

The Vanguard Short-Term Bond Index Fund ETF Shares (BSV) has a Alpha of 0.21 with a Mean Return of 0.16 and a R-squared of 78.38. Its Standard Deviation is 1.33 while BSV’s Sharpe Ratio is 0.98. Furthermore, the fund has a Beta of 0.38 and a Treynor Ratio of 3.33.

The iShares MSCI USA Momentum Factor ETF (MTUM) has a Mean Return of 0 with a Standard Deviation of 0 and a Beta of 0. Its Alpha is 0 while MTUM’s R-squared is 0. Furthermore, the fund has a Sharpe Ratio of 0 and a Treynor Ratio of 0.

BSV’s Mean Return is 0.16 points higher than that of MTUM and its R-squared is 78.38 points higher. With a Standard Deviation of 1.33, BSV is slightly more volatile than MTUM. The Alpha and Beta of BSV are 0.21 points higher and 0.38 points higher than MTUM’s Alpha and Beta.

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Performance

Annual Returns

BSV vs. MTUM - Annual Returns

YearBSVMTUM
20204.67%29.69%
20194.92%27.57%
20181.34%-1.77%
20171.2%37.6%
20161.42%4.89%
20150.92%9.12%
20141.32%14.48%
20130.17%0.0%
20121.98%0.0%
20113.04%0.0%
20104.0%0.0%

BSV had its best year in 2019 with an annual return of 4.92%. BSV’s worst year over the past decade yielded 0.17% and occurred in 2013. In most years the Vanguard Short-Term Bond Index Fund ETF Shares provided moderate returns such as in 2018, 2016, and 2012 where annual returns amounted to 1.34%, 1.42%, and 1.98% respectively.

The year 2017 was the strongest year for MTUM, returning 37.6% on an annual basis. The poorest year for MTUM in the last ten years was 2018, with a yield of -1.77%. Most years the iShares MSCI USA Momentum Factor ETF has given investors modest returns, such as in 2010, 2016, and 2015, when gains were 0.0%, 4.89%, and 9.12% respectively.

Portfolio Growth

BSV vs. MTUM - Portfolio Growth

FundInitial BalanceFinal BalanceCAGR
BSV$10,000$11,6792.27%
MTUM$10,000$29,30117.37%

A $10,000 investment in BSV would have resulted in a final balance of $11,679. This is a profit of $1,679 over 7 years and amounts to a compound annual growth rate (CAGR) of 2.27%.

With a $10,000 investment in MTUM, the end total would have been $29,301. This equates to a $19,301 profit over 7 years and a compound annual growth rate (CAGR) of 17.37%.

BSV’s CAGR is 15.10 percentage points lower than that of MTUM and as a result, would have yielded $17,622 less on a $10,000 investment. Thus, BSV performed worse than MTUM by 15.10% annually.


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