The iShares Russell 1000 ETF (IWB) and the iShares MSCI USA Momentum Factor ETF (MTUM) are both among the Top 100 ETFs. IWB is a iShares Large Blend fund and MTUM is a iShares Large Growth fund. So, what’s the difference between IWB and MTUM? And which fund is better?
IWB and MTUM have the same expense ratio: 0.15%. IWB also has a higher exposure to the technology sector and a higher standard deviation. Overall, IWB has provided lower returns than MTUM over the past ten years.
In this article, we’ll compare IWB vs. MTUM. We’ll look at portfolio growth and performance, as well as at their annual returns and holdings. Moreover, I’ll also discuss IWB’s and MTUM’s risk metrics, fund composition, and industry exposure and examine how these affect their overall returns.
|Name||iShares Russell 1000 ETF||iShares MSCI USA Momentum Factor ETF|
|Category||Large Blend||Large Growth|
The iShares Russell 1000 ETF (IWB) is a Large Blend fund that is issued by iShares. It currently has 30.54B total assets under management and has yielded an average annual return of 14.64% over the past 10 years. The fund has a dividend yield of 1.14% with an expense ratio of 0.15%.
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%.
IWB’s dividend yield is 0.70% higher than that of MTUM (1.14% vs. 0.44%). Also, IWB yielded on average 2.73% less per year over the past decade (14.64% vs. 17.37%). IWB and MTUM have the same expense ratio: 0.15%.
The iShares Russell 1000 ETF (IWB) has the most exposure to the Technology sector at 25.33%. This is followed by Financial Services and Healthcare at 13.64% and 13.35% respectively. Utilities (2.36%), Energy (2.44%), and Real Estate (3.34%) only make up 8.14% of the fund’s total assets.
IWB’s mid-section with moderate exposure is comprised of Consumer Defensive, Industrials, Communication Services, Consumer Cyclical, and Healthcare stocks at 5.97%, 8.88%, 10.83%, 11.85%, and 13.35%.
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%.
IWB is 10.09% more exposed to the Technology sector than MTUM (25.33% vs 15.24%). IWB’s exposure to Financial Services and Healthcare stocks is 20.68% lower and 6.94% higher respectively (13.64% vs. 34.32% and 13.35% vs. 6.41%). In total, Utilities, Energy, and Real Estate also make up 5.75% more of the fund’s holdings compared to MTUM (8.14% vs. 2.39%).
|Facebook Inc Class A||2.03%|
|Alphabet Inc Class A||1.93%|
|Alphabet Inc Class C||1.82%|
|Berkshire Hathaway Inc Class B||1.24%|
|JPMorgan Chase & Co||1.09%|
IWB’s Top Holdings are Apple Inc, Microsoft Corp, Amazon.com Inc, Facebook Inc Class A, and Alphabet Inc Class A at 5.45%, 5.11%, 3.43%, 2.03%, and 1.93%.
Alphabet Inc Class C (1.82%), Tesla Inc (1.27%), and Berkshire Hathaway Inc Class B (1.24%) have a slightly smaller but still significant weight. NVIDIA Corp and JPMorgan Chase & Co are also represented in the IWB’s holdings at 1.11% and 1.09%.
|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%|
|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%.
The iShares Russell 1000 ETF (IWB) has a Mean Return of 1.27 with a Sharpe Ratio of 1.05 and a Treynor Ratio of 14.31. Its Beta is 1.02 while IWB’s Alpha is -0.38. Furthermore, the fund has a R-squared of 99.73 and a Standard Deviation of 13.87.
The iShares MSCI USA Momentum Factor ETF (MTUM) has a Beta of 0 with a R-squared of 0 and a Mean Return of 0. Its Treynor Ratio is 0 while MTUM’s Sharpe Ratio is 0. Furthermore, the fund has a Alpha of 0 and a Standard Deviation of 0.
IWB’s Mean Return is 1.27 points higher than that of MTUM and its R-squared is 99.73 points higher. With a Standard Deviation of 13.87, IWB is slightly more volatile than MTUM. The Alpha and Beta of IWB are 0.38 points lower and 1.02 points higher than MTUM’s Alpha and Beta.
IWB had its best year in 2013 with an annual return of 32.93%. IWB’s worst year over the past decade yielded -4.91% and occurred in 2018. In most years the iShares Russell 1000 ETF provided moderate returns such as in 2014, 2010, and 2012 where annual returns amounted to 13.08%, 15.94%, and 16.27% 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.
|Fund||Initial Balance||Final Balance||CAGR|
A $10,000 investment in IWB would have resulted in a final balance of $23,378. This is a profit of $13,378 over 7 years and amounts to a compound annual growth rate (CAGR) of 14.64%.
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%.
IWB’s CAGR is 2.73 percentage points lower than that of MTUM and as a result, would have yielded $5,923 less on a $10,000 investment. Thus, IWB performed worse than MTUM by 2.73% annually.
Over the past years, I have discovered several tools and products that have helped me tremendously on my path to financial freedom:
P.S.: The links below are affiliate links, which means I receive a small commission at no extra cost to you when you sign up for one of the services. Thank you for your support!
1) Take a look at M1 Finance, my favorite broker. I love how easy it is to invest and maintain my portfolio with them. I can set up automatic transfers, rebalance my portfolio with one click and even borrow up to 35% of my assets at super low interest rates!
2) Fundrise is by far the best way I've found to invest in Real Estate. You can diversify your portfolio by investing in their eREITs or even allocate capital to individual properties (without the hassle of managing tenants!).
3) If you are interested in crypto, check out Gemini. I've started allocating a small amount of assets to the growing crypto space and Gemini has just been a breeze to use. Once you register, make sure to also open an Active Trader account to buy crypto at the lowest fees on the market (just 0.03%!).
To see all of my most up-to-date recommendations, check out the Recommended Tools section.