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IEMG vs. MTUM: What’s The Difference?

The iShares Core MSCI Emerging Markets ETF (IEMG) and the iShares MSCI USA Momentum Factor ETF (MTUM) are both among the Top 100 ETFs. IEMG is a iShares Diversified Emerging Mkts fund and MTUM is a iShares Large Growth fund. So, what’s the difference between IEMG and MTUM? And which fund is better?

The expense ratio of IEMG is 0.04 percentage points lower than MTUM’s (0.11% vs. 0.15%). IEMG also has a higher exposure to the technology sector and a lower standard deviation. Overall, IEMG has provided lower returns than MTUM over the past ten years.

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

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Summary

IEMGMTUM
NameiShares Core MSCI Emerging Markets ETFiShares MSCI USA Momentum Factor ETF
CategoryDiversified Emerging MktsLarge Growth
IssueriSharesiShares
AUM83.68B14.53B
Avg. Return7.41%17.37%
Div. Yield1.78%0.44%
Expense Ratio0.11%0.15%

The iShares Core MSCI Emerging Markets ETF (IEMG) is a Diversified Emerging Mkts fund that is issued by iShares. It currently has 83.68B total assets under management and has yielded an average annual return of 7.41% over the past 10 years. The fund has a dividend yield of 1.78% with an expense ratio of 0.11%.

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%.

IEMG’s dividend yield is 1.34% higher than that of MTUM (1.78% vs. 0.44%). Also, IEMG yielded on average 9.96% less per year over the past decade (7.41% vs. 17.37%). The expense ratio of IEMG is 0.04 percentage points lower than MTUM’s (0.11% vs. 0.15%).

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Fund Composition

Industry Exposure

IEMG vs. MTUM - Industry Exposure

IEMGMTUM
Technology20.44%15.24%
Industrials5.92%12.47%
Energy4.71%1.77%
Communication Services11.41%13.18%
Utilities2.13%0.19%
Healthcare5.73%6.41%
Consumer Defensive5.68%2.88%
Real Estate2.75%0.43%
Financial Services16.9%34.32%
Consumer Cyclical15.67%9.96%
Basic Materials8.64%3.15%

The iShares Core MSCI Emerging Markets ETF (IEMG) has the most exposure to the Technology sector at 20.44%. This is followed by Financial Services and Consumer Cyclical at 16.9% and 15.67% respectively. Real Estate (2.75%), Energy (4.71%), and Consumer Defensive (5.68%) only make up 13.14% of the fund’s total assets.

IEMG’s mid-section with moderate exposure is comprised of Healthcare, Industrials, Basic Materials, Communication Services, and Consumer Cyclical stocks at 5.73%, 5.92%, 8.64%, 11.41%, and 15.67%.

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%.

IEMG is 5.20% more exposed to the Technology sector than MTUM (20.44% vs 15.24%). IEMG’s exposure to Financial Services and Consumer Cyclical stocks is 17.42% lower and 5.71% higher respectively (16.9% vs. 34.32% and 15.67% vs. 9.96%). In total, Real Estate, Energy, and Consumer Defensive also make up 8.06% more of the fund’s holdings compared to MTUM (13.14% vs. 5.08%).

Holdings

IEMG - Holdings

IEMG HoldingsWeight
Taiwan Semiconductor Manufacturing Co Ltd5.37%
Tencent Holdings Ltd4.42%
Alibaba Group Holding Ltd Ordinary Shares4.38%
Samsung Electronics Co Ltd3.49%
Meituan1.52%
Naspers Ltd Class N0.93%
Vale SA0.91%
Reliance Industries Ltd Shs Dematerialised0.83%
China Construction Bank Corp Class H0.77%
Infosys Ltd0.74%

IEMG’s Top Holdings are Taiwan Semiconductor Manufacturing Co Ltd, Tencent Holdings Ltd, Alibaba Group Holding Ltd Ordinary Shares, Samsung Electronics Co Ltd, and Meituan at 5.37%, 4.42%, 4.38%, 3.49%, and 1.52%.

Naspers Ltd Class N (0.93%), Vale SA (0.91%), and Reliance Industries Ltd Shs Dematerialised (0.83%) have a slightly smaller but still significant weight. China Construction Bank Corp Class H and Infosys Ltd are also represented in the IEMG’s holdings at 0.77% and 0.74%.

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

IEMGMTUM
Mean Return00
R-squared00
Std. Deviation00
Alpha00
Beta00
Sharpe Ratio00
Treynor Ratio00

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

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

IEMG’s Mean Return is 0.00 points lower than that of MTUM and its R-squared is 0.00 points lower. With a Standard Deviation of 0, IEMG is slightly less volatile than MTUM. The Alpha and Beta of IEMG are 0.00 points lower and 0.00 points lower than MTUM’s Alpha and Beta.

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Performance

Annual Returns

IEMG vs. MTUM - Annual Returns

YearIEMGMTUM
202018.18%29.69%
201917.5%27.57%
2018-14.69%-1.77%
201736.78%37.6%
20169.98%4.89%
2015-13.86%9.12%
2014-2.04%14.48%
2013-2.16%0.0%
20120.0%0.0%
20110.0%0.0%
20100.0%0.0%

IEMG had its best year in 2017 with an annual return of 36.78%. IEMG’s worst year over the past decade yielded -14.69% and occurred in 2018. In most years the iShares Core MSCI Emerging Markets ETF provided moderate returns such as in 2012, 2011, and 2010 where annual returns amounted to 0.0%, 0.0%, and 0.0% 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

IEMG vs. MTUM - Portfolio Growth

FundInitial BalanceFinal BalanceCAGR
IEMG$10,000$15,0377.41%
MTUM$10,000$29,30117.37%

A $10,000 investment in IEMG would have resulted in a final balance of $15,037. This is a profit of $5,037 over 7 years and amounts to a compound annual growth rate (CAGR) of 7.41%.

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%.

IEMG’s CAGR is 9.96 percentage points lower than that of MTUM and as a result, would have yielded $14,264 less on a $10,000 investment. Thus, IEMG performed worse than MTUM by 9.96% annually.


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