The iShares Core S&P Total U.S. Stock Market ETF (ITOT) and the iShares MSCI USA Momentum Factor ETF (MTUM) are both among the Top 100 ETFs. ITOT is a iShares Large Blend fund and MTUM is a iShares Large Growth fund. So, what’s the difference between ITOT and MTUM? And which fund is better?
The expense ratio of ITOT is 0.12 percentage points lower than MTUM’s (0.03% vs. 0.15%). ITOT also has a higher exposure to the technology sector and a higher standard deviation. Overall, ITOT has provided lower returns than MTUM over the past ten years.
In this article, we’ll compare ITOT vs. MTUM. We’ll look at risk metrics and performance, as well as at their portfolio growth and holdings. Moreover, I’ll also discuss ITOT’s and MTUM’s annual returns, fund composition, and industry exposure and examine how these affect their overall returns.
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Summary
| ITOT | MTUM | |
| Name | iShares Core S&P Total U.S. Stock Market ETF | iShares MSCI USA Momentum Factor ETF |
| Category | Large Blend | Large Growth |
| Issuer | iShares | iShares |
| AUM | 41.97B | 14.53B |
| Avg. Return | 14.59% | 17.37% |
| Div. Yield | 1.2% | 0.44% |
| Expense Ratio | 0.03% | 0.15% |
The iShares Core S&P Total U.S. Stock Market ETF (ITOT) is a Large Blend fund that is issued by iShares. It currently has 41.97B total assets under management and has yielded an average annual return of 14.59% over the past 10 years. The fund has a dividend yield of 1.2% with an expense ratio of 0.03%.
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%.
ITOT’s dividend yield is 0.76% higher than that of MTUM (1.2% vs. 0.44%). Also, ITOT yielded on average 2.78% less per year over the past decade (14.59% vs. 17.37%). The expense ratio of ITOT is 0.12 percentage points lower than MTUM’s (0.03% vs. 0.15%).
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Fund Composition
Industry Exposure
| ITOT | MTUM | |
| Technology | 24.49% | 15.24% |
| Industrials | 9.21% | 12.47% |
| Energy | 2.51% | 1.77% |
| Communication Services | 10.54% | 13.18% |
| Utilities | 2.35% | 0.19% |
| Healthcare | 13.59% | 6.41% |
| Consumer Defensive | 5.79% | 2.88% |
| Real Estate | 3.67% | 0.43% |
| Financial Services | 13.69% | 34.32% |
| Consumer Cyclical | 11.69% | 9.96% |
| Basic Materials | 2.47% | 3.15% |
The iShares Core S&P Total U.S. Stock Market ETF (ITOT) has the most exposure to the Technology sector at 24.49%. This is followed by Financial Services and Healthcare at 13.69% and 13.59% respectively. Basic Materials (2.47%), Energy (2.51%), and Real Estate (3.67%) only make up 8.65% of the fund’s total assets.
ITOT’s mid-section with moderate exposure is comprised of Consumer Defensive, Industrials, Communication Services, Consumer Cyclical, and Healthcare stocks at 5.79%, 9.21%, 10.54%, 11.69%, and 13.59%.
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%.
ITOT is 9.25% more exposed to the Technology sector than MTUM (24.49% vs 15.24%). ITOT’s exposure to Financial Services and Healthcare stocks is 20.63% lower and 7.18% higher respectively (13.69% vs. 34.32% and 13.59% vs. 6.41%). In total, Basic Materials, Energy, and Real Estate also make up 3.30% more of the fund’s holdings compared to MTUM (8.65% vs. 5.35%).
Holdings
| ITOT Holdings | Weight |
| Apple Inc | 5.07% |
| Microsoft Corp | 4.75% |
| Amazon.com Inc | 3.16% |
| Facebook Inc Class A | 1.89% |
| Alphabet Inc Class A | 1.79% |
| Alphabet Inc Class C | 1.71% |
| Tesla Inc | 1.17% |
| Berkshire Hathaway Inc Class B | 1.17% |
| NVIDIA Corp | 1.08% |
| JPMorgan Chase & Co | 1.02% |
ITOT’s Top Holdings are Apple Inc, Microsoft Corp, Amazon.com Inc, Facebook Inc Class A, and Alphabet Inc Class A at 5.07%, 4.75%, 3.16%, 1.89%, and 1.79%.
Alphabet Inc Class C (1.71%), Tesla Inc (1.17%), and Berkshire Hathaway Inc Class B (1.17%) have a slightly smaller but still significant weight. NVIDIA Corp and JPMorgan Chase & Co are also represented in the ITOT’s holdings at 1.08% and 1.02%.
| 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
| ITOT | MTUM | |
| Mean Return | 1.27 | 0 |
| R-squared | 99.4 | 0 |
| Std. Deviation | 14.02 | 0 |
| Alpha | -0.54 | 0 |
| Beta | 1.03 | 0 |
| Sharpe Ratio | 1.04 | 0 |
| Treynor Ratio | 14.13 | 0 |
The iShares Core S&P Total U.S. Stock Market ETF (ITOT) has a Alpha of -0.54 with a Sharpe Ratio of 1.04 and a R-squared of 99.4. Its Treynor Ratio is 14.13 while ITOT’s Mean Return is 1.27. Furthermore, the fund has a Standard Deviation of 14.02 and a Beta of 1.03.
The iShares MSCI USA Momentum Factor ETF (MTUM) has a Mean Return of 0 with a Alpha of 0 and a Sharpe Ratio of 0. Its Beta is 0 while MTUM’s R-squared is 0. Furthermore, the fund has a Standard Deviation of 0 and a Treynor Ratio of 0.
ITOT’s Mean Return is 1.27 points higher than that of MTUM and its R-squared is 99.40 points higher. With a Standard Deviation of 14.02, ITOT is slightly more volatile than MTUM. The Alpha and Beta of ITOT are 0.54 points lower and 1.03 points higher than MTUM’s Alpha and Beta.
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Performance
Annual Returns
| Year | ITOT | MTUM |
| 2020 | 20.75% | 29.69% |
| 2019 | 30.87% | 27.57% |
| 2018 | -5.27% | -1.77% |
| 2017 | 21.23% | 37.6% |
| 2016 | 12.59% | 4.89% |
| 2015 | 0.96% | 9.12% |
| 2014 | 13.01% | 14.48% |
| 2013 | 32.67% | 0.0% |
| 2012 | 15.98% | 0.0% |
| 2011 | 1.55% | 0.0% |
| 2010 | 16.15% | 0.0% |
ITOT had its best year in 2013 with an annual return of 32.67%. ITOT’s worst year over the past decade yielded -5.27% and occurred in 2018. In most years the iShares Core S&P Total U.S. Stock Market ETF provided moderate returns such as in 2014, 2012, and 2010 where annual returns amounted to 13.01%, 15.98%, and 16.15% 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 |
| ITOT | $10,000 | $23,312 | 14.59% |
| MTUM | $10,000 | $29,301 | 17.37% |
A $10,000 investment in ITOT would have resulted in a final balance of $23,312. This is a profit of $13,312 over 7 years and amounts to a compound annual growth rate (CAGR) of 14.59%.
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%.
ITOT’s CAGR is 2.78 percentage points lower than that of MTUM and as a result, would have yielded $5,989 less on a $10,000 investment. Thus, ITOT performed worse than MTUM by 2.78% annually.
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