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IWB vs. MTUM: What’s The Difference?

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.

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Summary

IWBMTUM
NameiShares Russell 1000 ETFiShares MSCI USA Momentum Factor ETF
CategoryLarge BlendLarge Growth
IssueriSharesiShares
AUM30.54B14.53B
Avg. Return14.64%17.37%
Div. Yield1.14%0.44%
Expense Ratio0.15%0.15%

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%.

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Fund Composition

Industry Exposure

IWB vs. MTUM - Industry Exposure

IWBMTUM
Technology25.33%15.24%
Industrials8.88%12.47%
Energy2.44%1.77%
Communication Services10.83%13.18%
Utilities2.36%0.19%
Healthcare13.35%6.41%
Consumer Defensive5.97%2.88%
Real Estate3.34%0.43%
Financial Services13.64%34.32%
Consumer Cyclical11.85%9.96%
Basic Materials2.02%3.15%

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%).

Holdings

IWB - Holdings

IWB HoldingsWeight
Apple Inc5.45%
Microsoft Corp5.11%
Amazon.com Inc3.43%
Facebook Inc Class A2.03%
Alphabet Inc Class A1.93%
Alphabet Inc Class C1.82%
Tesla Inc1.27%
Berkshire Hathaway Inc Class B1.24%
NVIDIA Corp1.11%
JPMorgan Chase & Co1.09%

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%.

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

IWBMTUM
Mean Return1.270
R-squared99.730
Std. Deviation13.870
Alpha-0.380
Beta1.020
Sharpe Ratio1.050
Treynor Ratio14.310

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.

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Performance

Annual Returns

IWB vs. MTUM - Annual Returns

YearIWBMTUM
202020.8%29.69%
201931.26%27.57%
2018-4.91%-1.77%
201721.53%37.6%
201611.91%4.89%
20150.82%9.12%
201413.08%14.48%
201332.93%0.0%
201216.27%0.0%
20111.36%0.0%
201015.94%0.0%

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.

Portfolio Growth

IWB vs. MTUM - Portfolio Growth

FundInitial BalanceFinal BalanceCAGR
IWB$10,000$23,37814.64%
MTUM$10,000$29,30117.37%

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.


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