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IJR vs. MTUM: What’s The Difference?

The iShares Core S&P Small-Cap ETF (IJR) and the iShares MSCI USA Momentum Factor ETF (MTUM) are both among the Top 100 ETFs. IJR is a iShares Small Blend fund and MTUM is a iShares Large Growth fund. So, what’s the difference between IJR and MTUM? And which fund is better?

The expense ratio of IJR is 0.09 percentage points lower than MTUM’s (0.06% vs. 0.15%). IJR also has a higher exposure to the industrials sector and a higher standard deviation. Overall, IJR has provided lower returns than MTUM over the past ten years.

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

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Summary

IJRMTUM
NameiShares Core S&P Small-Cap ETFiShares MSCI USA Momentum Factor ETF
CategorySmall BlendLarge Growth
IssueriSharesiShares
AUM68.64B14.53B
Avg. Return13.97%17.37%
Div. Yield0.96%0.44%
Expense Ratio0.06%0.15%

The iShares Core S&P Small-Cap ETF (IJR) is a Small Blend fund that is issued by iShares. It currently has 68.64B total assets under management and has yielded an average annual return of 13.97% over the past 10 years. The fund has a dividend yield of 0.96% with an expense ratio of 0.06%.

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%.

IJR’s dividend yield is 0.52% higher than that of MTUM (0.96% vs. 0.44%). Also, IJR yielded on average 3.40% less per year over the past decade (13.97% vs. 17.37%). The expense ratio of IJR is 0.09 percentage points lower than MTUM’s (0.06% vs. 0.15%).

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Fund Composition

Industry Exposure

IJR vs. MTUM - Industry Exposure

IJRMTUM
Technology14.32%15.24%
Industrials17.31%12.47%
Energy4.0%1.77%
Communication Services2.59%13.18%
Utilities1.8%0.19%
Healthcare11.55%6.41%
Consumer Defensive4.01%2.88%
Real Estate9.55%0.43%
Financial Services15.91%34.32%
Consumer Cyclical13.61%9.96%
Basic Materials5.34%3.15%

The iShares Core S&P Small-Cap ETF (IJR) has the most exposure to the Industrials sector at 17.31%. This is followed by Financial Services and Technology at 15.91% and 14.32% respectively. Communication Services (2.59%), Energy (4.0%), and Consumer Defensive (4.01%) only make up 10.60% of the fund’s total assets.

IJR’s mid-section with moderate exposure is comprised of Basic Materials, Real Estate, Healthcare, Consumer Cyclical, and Technology stocks at 5.34%, 9.55%, 11.55%, 13.61%, and 14.32%.

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%.

IJR is 4.84% more exposed to the Industrials sector than MTUM (17.31% vs 12.47%). IJR’s exposure to Financial Services and Technology stocks is 18.41% lower and 0.92% lower respectively (15.91% vs. 34.32% and 14.32% vs. 15.24%). In total, Communication Services, Energy, and Consumer Defensive also make up 7.23% less of the fund’s holdings compared to MTUM (10.60% vs. 17.83%).

Holdings

IJR - Holdings

IJR HoldingsWeight
BlackRock Cash Funds Treasury SL Agency1.08%
GameStop Corp Class A0.86%
Omnicell Inc0.61%
Stamps.com Inc0.58%
Saia Inc0.57%
Power Integrations Inc0.57%
Exponent Inc0.54%
NeoGenomics Inc0.53%
Chart Industries Inc0.53%
Macy’s Inc0.51%

IJR’s Top Holdings are BlackRock Cash Funds Treasury SL Agency, GameStop Corp Class A, Omnicell Inc, Stamps.com Inc, and Saia Inc at 1.08%, 0.86%, 0.61%, 0.58%, and 0.57%.

Power Integrations Inc (0.57%), Exponent Inc (0.54%), and NeoGenomics Inc (0.53%) have a slightly smaller but still significant weight. Chart Industries Inc and Macy’s Inc are also represented in the IJR’s holdings at 0.53% and 0.51%.

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

IJRMTUM
Mean Return1.210
R-squared76.030
Std. Deviation18.680
Alpha-3.70
Beta1.20
Sharpe Ratio0.740
Treynor Ratio10.770

The iShares Core S&P Small-Cap ETF (IJR) has a Alpha of -3.7 with a Standard Deviation of 18.68 and a Treynor Ratio of 10.77. Its Beta is 1.2 while IJR’s Mean Return is 1.21. Furthermore, the fund has a R-squared of 76.03 and a Sharpe Ratio of 0.74.

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

IJR’s Mean Return is 1.21 points higher than that of MTUM and its R-squared is 76.03 points higher. With a Standard Deviation of 18.68, IJR is slightly more volatile than MTUM. The Alpha and Beta of IJR are 3.70 points lower and 1.20 points higher than MTUM’s Alpha and Beta.

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Performance

Annual Returns

IJR vs. MTUM - Annual Returns

YearIJRMTUM
202011.24%29.69%
201922.79%27.57%
2018-8.43%-1.77%
201713.2%37.6%
201626.49%4.89%
2015-2.0%9.12%
20145.67%14.48%
201341.36%0.0%
201216.28%0.0%
20110.9%0.0%
201026.14%0.0%

IJR had its best year in 2013 with an annual return of 41.36%. IJR’s worst year over the past decade yielded -8.43% and occurred in 2018. In most years the iShares Core S&P Small-Cap ETF provided moderate returns such as in 2020, 2017, and 2012 where annual returns amounted to 11.24%, 13.2%, and 16.28% 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

IJR vs. MTUM - Portfolio Growth

FundInitial BalanceFinal BalanceCAGR
IJR$10,000$18,54613.97%
MTUM$10,000$29,30117.37%

A $10,000 investment in IJR would have resulted in a final balance of $18,546. This is a profit of $8,546 over 7 years and amounts to a compound annual growth rate (CAGR) of 13.97%.

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%.

IJR’s CAGR is 3.40 percentage points lower than that of MTUM and as a result, would have yielded $10,755 less on a $10,000 investment. Thus, IJR performed worse than MTUM by 3.40% annually.


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