The iShares Gold Trust (IAU) and the iShares MSCI USA Momentum Factor ETF (MTUM) are both among the Top 100 ETFs. IAU is a iShares N/A fund and MTUM is a iShares Large Growth fund. So, what’s the difference between IAU and MTUM? And which fund is better?
The expense ratio of IAU is 0.10 percentage points higher than MTUM’s (0.25% vs. 0.15%). IAU also has a lower exposure to the technology sector and a higher standard deviation. Overall, IAU has provided lower returns than MTUM over the past 7 years.
In this article, we’ll compare IAU vs. MTUM. We’ll look at performance and fund composition, as well as at their holdings and industry exposure. Moreover, I’ll also discuss IAU’s and MTUM’s portfolio growth, annual returns, and risk metrics and examine how these affect their overall returns.
Summary
| IAU | MTUM | |
| Name | iShares Gold Trust | iShares MSCI USA Momentum Factor ETF |
| Category | N/A | Large Growth |
| Issuer | iShares | iShares |
| AUM | 28.61B | 14.53B |
| Avg. Return | 6.03% | 17.37% |
| Div. Yield | 0.0% | 0.44% |
| Expense Ratio | 0.25% | 0.15% |
The iShares Gold Trust (IAU) is a N/A fund that is issued by iShares. It currently has 28.61B total assets under management and has yielded an average annual return of 6.03% over the past 10 years. The fund has a dividend yield of 0.0% with an expense ratio of 0.25%.
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%.
IAU’s dividend yield is 0.44% lower than that of MTUM (0.0% vs. 0.44%). Also, IAU yielded on average 11.34% less per year over the past decade (6.03% vs. 17.37%). The expense ratio of IAU is 0.10 percentage points higher than MTUM’s (0.25% vs. 0.15%).
Fund Composition
Industry Exposure
| IAU | MTUM | |
| Technology | 0.0% | 15.24% |
| Industrials | 0.0% | 12.47% |
| Energy | 0.0% | 1.77% |
| Communication Services | 0.0% | 13.18% |
| Utilities | 0.0% | 0.19% |
| Healthcare | 0.0% | 6.41% |
| Consumer Defensive | 0.0% | 2.88% |
| Real Estate | 0.0% | 0.43% |
| Financial Services | 0.0% | 34.32% |
| Consumer Cyclical | 0.0% | 9.96% |
| Basic Materials | 0.0% | 3.15% |
The iShares Gold Trust (IAU) has the most exposure to the Technology sector at 0.0%. This is followed by Industrials and Energy at 0.0% and 0.0% respectively. Consumer Cyclical (0.0%), Financial Services (0.0%), and Real Estate (0.0%) only make up 0.00% of the fund’s total assets.
IAU’s mid-section with moderate exposure is comprised of Consumer Defensive, Healthcare, Utilities, Communication Services, and Energy stocks at 0.0%, 0.0%, 0.0%, 0.0%, and 0.0%.
The iShares MSCI USA Momentum Factor ETF (MTUM) has the most exposure to the Financial Services sector at 34.32%. This is followed by Technology and Communication Services at 15.24% and 13.18% respectively. Real Estate (0.43%), Energy (1.77%), and Consumer Defensive (2.88%) only make up 5.08% of the fund’s total assets.
MTUM’s mid-section with moderate exposure is comprised of Basic Materials, Healthcare, Consumer Cyclical, Industrials, and Communication Services stocks at 3.15%, 6.41%, 9.96%, 12.47%, and 13.18%.
IAU is 15.24% less exposed to the Technology sector than MTUM (0.0% vs 15.24%). IAU’s exposure to Industrials and Energy stocks is 12.47% lower and 1.77% lower respectively (0.0% vs. 12.47% and 0.0% vs. 1.77%). In total, Consumer Cyclical, Financial Services, and Real Estate also make up 44.71% less of the fund’s holdings compared to MTUM (0.00% vs. 44.71%).
Holdings
| IAU Holdings | Weight |
| Gold | 100.0% |
| N/A | 0% |
| N/A | 0% |
| N/A | 0% |
| N/A | 0% |
| N/A | 0% |
| N/A | 0% |
| N/A | 0% |
| N/A | 0% |
| N/A | 0% |
IAU’s Top Holdings are Gold, N/A, N/A, N/A, and N/A at 100.0%, 0%, 0%, 0%, and 0%.
N/A (0%), N/A (0%), and N/A (0%) have a slightly smaller but still significant weight. N/A and N/A are also represented in the IAU’s holdings at 0% and 0%.
| MTUM Holdings | Weight |
| Tesla Inc | 5.63% |
| The Walt Disney Co | 4.39% |
| JPMorgan Chase & Co | 4.35% |
| Berkshire Hathaway Inc Class B | 4.34% |
| Bank of America Corp | 3.81% |
| PayPal Holdings Inc | 3.76% |
| Wells Fargo & Co | 3.05% |
| Applied Materials Inc | 3.05% |
| Moderna Inc | 2.89% |
| Alphabet Inc Class C | 2.84% |
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%.
Risk Analysis
| IAU | MTUM | |
| Mean Return | 0.23 | 0 |
| R-squared | 16.03 | 0 |
| Std. Deviation | 16.97 | 0 |
| Alpha | 4.16 | 0 |
| Beta | 0.48 | 0 |
| Sharpe Ratio | 0.13 | 0 |
| Treynor Ratio | 1.5 | 0 |
The iShares Gold Trust (IAU) has a R-squared of 16.03 with a Treynor Ratio of 1.5 and a Mean Return of 0.23. Its Alpha is 4.16 while IAU’s Standard Deviation is 16.97. Furthermore, the fund has a Beta of 0.48 and a Sharpe Ratio of 0.13.
The iShares MSCI USA Momentum Factor ETF (MTUM) has a Standard Deviation of 0 with a Treynor Ratio of 0 and a R-squared of 0. Its Beta is 0 while MTUM’s Mean Return is 0. Furthermore, the fund has a Alpha of 0 and a Sharpe Ratio of 0.
IAU’s Mean Return is 0.23 points higher than that of MTUM and its R-squared is 16.03 points higher. With a Standard Deviation of 16.97, IAU is slightly more volatile than MTUM. The Alpha and Beta of IAU are 4.16 points higher and 0.48 points higher than MTUM’s Alpha and Beta.
Performance
Annual Returns
| Year | IAU | MTUM |
| 2020 | 23.86% | 29.69% |
| 2019 | 18.54% | 27.57% |
| 2018 | -1.39% | -1.77% |
| 2017 | 11.58% | 37.6% |
| 2016 | 8.85% | 4.89% |
| 2015 | -11.65% | 9.12% |
| 2014 | -0.44% | 14.48% |
| 2013 | -27.96% | 0.0% |
| 2012 | 8.37% | 0.0% |
| 2011 | 8.66% | 0.0% |
| 2010 | 27.93% | 0.0% |
IAU had its best year in 2010 with an annual return of 27.93%. IAU’s worst year over the past decade yielded -27.96% and occurred in 2013. In most years the iShares Gold Trust provided moderate returns such as in 2012, 2011, and 2016 where annual returns amounted to 8.37%, 8.66%, and 8.85% 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
| Fund | Initial Balance | Final Balance | CAGR |
| IAU | $10,000 | $15,467 | 6.03% |
| MTUM | $10,000 | $29,301 | 17.37% |
A $10,000 investment in IAU would have resulted in a final balance of $15,467. This is a profit of $5,467 over 7 years and amounts to a compound annual growth rate (CAGR) of 6.03%.
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%.
IAU’s CAGR is 11.34 percentage points lower than that of MTUM and as a result, would have yielded $13,834 less on a $10,000 investment. Thus, IAU performed worse than MTUM by 11.34% annually.
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