IVW vs. MTUM: What’s The Difference?

The iShares S&P 500 Growth ETF (IVW) and the iShares MSCI USA Momentum Factor ETF (MTUM) are both among the Top 100 ETFs. IVW is a iShares Large Growth fund and MTUM is a iShares Large Growth fund. So, what’s the difference between IVW and MTUM? And which fund is better?

The expense ratio of IVW is 0.03 percentage points higher than MTUM’s (0.18% vs. 0.15%). IVW also has a higher exposure to the technology sector and a higher standard deviation. Overall, IVW has provided lower returns than MTUM over the past ten years.

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

Summary

IVW MTUM
Name iShares S&P 500 Growth ETF iShares MSCI USA Momentum Factor ETF
Category Large Growth Large Growth
Issuer iShares iShares
AUM 35.72B 14.53B
Avg. Return 16.74% 17.37%
Div. Yield 0.61% 0.44%
Expense Ratio 0.18% 0.15%

The iShares S&P 500 Growth ETF (IVW) is a Large Growth fund that is issued by iShares. It currently has 35.72B total assets under management and has yielded an average annual return of 16.74% over the past 10 years. The fund has a dividend yield of 0.61% with an expense ratio of 0.18%.

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%.

IVW’s dividend yield is 0.17% higher than that of MTUM (0.61% vs. 0.44%). Also, IVW yielded on average 0.63% less per year over the past decade (16.74% vs. 17.37%). The expense ratio of IVW is 0.03 percentage points higher than MTUM’s (0.18% vs. 0.15%).

Fund Composition

Industry Exposure

IVW vs. MTUM - Industry Exposure

IVW MTUM
Technology 37.8% 15.24%
Industrials 5.72% 12.47%
Energy 0.06% 1.77%
Communication Services 15.44% 13.18%
Utilities 0.47% 0.19%
Healthcare 11.88% 6.41%
Consumer Defensive 3.84% 2.88%
Real Estate 1.11% 0.43%
Financial Services 6.78% 34.32%
Consumer Cyclical 15.25% 9.96%
Basic Materials 1.65% 3.15%

The iShares S&P 500 Growth ETF (IVW) has the most exposure to the Technology sector at 37.8%. This is followed by Communication Services and Consumer Cyclical at 15.44% and 15.25% respectively. Utilities (0.47%), Real Estate (1.11%), and Basic Materials (1.65%) only make up 3.23% of the fund’s total assets.

IVW’s mid-section with moderate exposure is comprised of Consumer Defensive, Industrials, Financial Services, Healthcare, and Consumer Cyclical stocks at 3.84%, 5.72%, 6.78%, 11.88%, and 15.25%.

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%.

IVW is 22.56% more exposed to the Technology sector than MTUM (37.8% vs 15.24%). IVW’s exposure to Communication Services and Consumer Cyclical stocks is 2.26% higher and 5.29% higher respectively (15.44% vs. 13.18% and 15.25% vs. 9.96%). In total, Utilities, Real Estate, and Basic Materials also make up 0.54% less of the fund’s holdings compared to MTUM (3.23% vs. 3.77%).

Holdings

IVW - Holdings

IVW Holdings Weight
Apple Inc 11.46%
Microsoft Corp 10.75%
Amazon.com Inc 7.14%
Facebook Inc Class A 4.28%
Alphabet Inc Class A 4.06%
Alphabet Inc Class C 3.86%
Tesla Inc 2.65%
NVIDIA Corp 2.43%
PayPal Holdings Inc 1.62%
Adobe Inc 1.49%

IVW’s Top Holdings are Apple Inc, Microsoft Corp, Amazon.com Inc, Facebook Inc Class A, and Alphabet Inc Class A at 11.46%, 10.75%, 7.14%, 4.28%, and 4.06%.

Alphabet Inc Class C (3.86%), Tesla Inc (2.65%), and NVIDIA Corp (2.43%) have a slightly smaller but still significant weight. PayPal Holdings Inc and Adobe Inc are also represented in the IVW’s holdings at 1.62% and 1.49%.

MTUM - Holdings

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

IVW MTUM
Mean Return 1.44 0
R-squared 93.82 0
Std. Deviation 13.77 0
Alpha 2.19 0
Beta 0.98 0
Sharpe Ratio 1.21 0
Treynor Ratio 17.24 0

The iShares S&P 500 Growth ETF (IVW) has a R-squared of 93.82 with a Mean Return of 1.44 and a Treynor Ratio of 17.24. Its Standard Deviation is 13.77 while IVW’s Sharpe Ratio is 1.21. Furthermore, the fund has a Beta of 0.98 and a Alpha of 2.19.

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

IVW’s Mean Return is 1.44 points higher than that of MTUM and its R-squared is 93.82 points higher. With a Standard Deviation of 13.77, IVW is slightly more volatile than MTUM. The Alpha and Beta of IVW are 2.19 points higher and 0.98 points higher than MTUM’s Alpha and Beta.

Performance

Annual Returns

IVW vs. MTUM - Annual Returns

Year IVW MTUM
2020 33.21% 29.69%
2019 30.91% 27.57%
2018 -0.17% -1.77%
2017 27.2% 37.6%
2016 6.74% 4.89%
2015 5.33% 9.12%
2014 14.67% 14.48%
2013 32.48% 0.0%
2012 14.39% 0.0%
2011 4.49% 0.0%
2010 14.84% 0.0%

IVW had its best year in 2020 with an annual return of 33.21%. IVW’s worst year over the past decade yielded -0.17% and occurred in 2018. In most years the iShares S&P 500 Growth ETF provided moderate returns such as in 2012, 2014, and 2010 where annual returns amounted to 14.39%, 14.67%, and 14.84% 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

IVW vs. MTUM - Portfolio Growth

Fund Initial Balance Final Balance CAGR
IVW $10,000 $28,548 16.74%
MTUM $10,000 $29,301 17.37%

A $10,000 investment in IVW would have resulted in a final balance of $28,548. This is a profit of $18,548 over 7 years and amounts to a compound annual growth rate (CAGR) of 16.74%.

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%.

IVW’s CAGR is 0.63 percentage points lower than that of MTUM and as a result, would have yielded $753 less on a $10,000 investment. Thus, IVW performed worse than MTUM by 0.63% annually.


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