The iShares Russell 1000 Value ETF (IWD) and the iShares MSCI USA Momentum Factor ETF (MTUM) are both among the Top 100 ETFs. IWD is a iShares Large Value fund and MTUM is a iShares Large Growth fund. So, what’s the difference between IWD and MTUM? And which fund is better?
The expense ratio of IWD is 0.04 percentage points higher than MTUM’s (0.19% vs. 0.15%). IWD also has a lower exposure to the financial services sector and a higher standard deviation. Overall, IWD has provided lower returns than MTUM over the past ten years.
In this article, we’ll compare IWD vs. MTUM. We’ll look at annual returns and industry exposure, as well as at their portfolio growth and holdings. Moreover, I’ll also discuss IWD’s and MTUM’s risk metrics, fund composition, and performance and examine how these affect their overall returns.
|Name||iShares Russell 1000 Value ETF||iShares MSCI USA Momentum Factor ETF|
|Category||Large Value||Large Growth|
The iShares Russell 1000 Value ETF (IWD) is a Large Value fund that is issued by iShares. It currently has 54.1B total assets under management and has yielded an average annual return of 11.40% over the past 10 years. The fund has a dividend yield of 1.57% with an expense ratio of 0.19%.
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%.
IWD’s dividend yield is 1.13% higher than that of MTUM (1.57% vs. 0.44%). Also, IWD yielded on average 5.97% less per year over the past decade (11.40% vs. 17.37%). The expense ratio of IWD is 0.04 percentage points higher than MTUM’s (0.19% vs. 0.15%).
FYI: The best way I've found to invest in ETFs is through M1 Finance. It's free and you even get an instant line of credit! Have a look here (link to M1 Finance).
The iShares Russell 1000 Value ETF (IWD) has the most exposure to the Financial Services sector at 20.43%. This is followed by Healthcare and Industrials at 17.78% and 11.77% respectively. Energy (4.76%), Utilities (4.88%), and Real Estate (4.94%) only make up 14.58% of the fund’s total assets.
IWD’s mid-section with moderate exposure is comprised of Consumer Cyclical, Consumer Defensive, Communication Services, Technology, and Industrials stocks at 5.62%, 7.76%, 8.67%, 10.28%, and 11.77%.
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%.
IWD is 13.89% less exposed to the Financial Services sector than MTUM (20.43% vs 34.32%). IWD’s exposure to Healthcare and Industrials stocks is 11.37% higher and 0.70% lower respectively (17.78% vs. 6.41% and 11.77% vs. 12.47%). In total, Energy, Utilities, and Real Estate also make up 12.19% more of the fund’s holdings compared to MTUM (14.58% vs. 2.39%).
|Berkshire Hathaway Inc Class B||2.58%|
|JPMorgan Chase & Co||2.25%|
|Johnson & Johnson||2.24%|
|UnitedHealth Group Inc||1.78%|
|Procter & Gamble Co||1.71%|
|The Walt Disney Co||1.5%|
|Bank of America Corp||1.43%|
|Comcast Corp Class A||1.33%|
|Exxon Mobil Corp||1.2%|
IWD’s Top Holdings are Berkshire Hathaway Inc Class B, JPMorgan Chase & Co, Johnson & Johnson, UnitedHealth Group Inc, and Procter & Gamble Co at 2.58%, 2.25%, 2.24%, 1.78%, and 1.71%.
The Walt Disney Co (1.5%), Bank of America Corp (1.43%), and Comcast Corp Class A (1.33%) have a slightly smaller but still significant weight. Exxon Mobil Corp and Pfizer Inc are also represented in the IWD’s holdings at 1.2% and 1.18%.
|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%.
NOTE: The easiest way to add diversification to your portfolio is to invest in real estate through Fundrise. You can become private real estate investor without the burden of property management! Check it out here (link to Fundrise).
The iShares Russell 1000 Value ETF (IWD) has a Sharpe Ratio of 0.81 with a Alpha of -3.23 and a Beta of 1.02. Its Treynor Ratio is 11.06 while IWD’s Standard Deviation is 14.35. Furthermore, the fund has a Mean Return of 1.03 and a R-squared of 92.38.
The iShares MSCI USA Momentum Factor ETF (MTUM) has a Sharpe Ratio of 0 with a Standard Deviation of 0 and a Beta of 0. Its Mean Return is 0 while MTUM’s Treynor Ratio is 0. Furthermore, the fund has a R-squared of 0 and a Alpha of 0.
IWD’s Mean Return is 1.03 points higher than that of MTUM and its R-squared is 92.38 points higher. With a Standard Deviation of 14.35, IWD is slightly more volatile than MTUM. The Alpha and Beta of IWD are 3.23 points lower and 1.02 points higher than MTUM’s Alpha and Beta.
BTW: Uncorrelated crypto assets such as Bitcoin can serve as a hedge and mitigate risk. I've allocated around 5% of my portfolio to crypto assets through Coinbase - the simplest and cheapest broker I've found! Click here to read more (link to Coinbase).
IWD had its best year in 2013 with an annual return of 32.18%. IWD’s worst year over the past decade yielded -8.4% and occurred in 2018. In most years the iShares Russell 1000 Value ETF provided moderate returns such as in 2014, 2017, and 2010 where annual returns amounted to 13.21%, 13.47%, and 15.3% 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 IWD would have resulted in a final balance of $17,165. This is a profit of $7,165 over 7 years and amounts to a compound annual growth rate (CAGR) of 11.40%.
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%.
IWD’s CAGR is 5.97 percentage points lower than that of MTUM and as a result, would have yielded $12,136 less on a $10,000 investment. Thus, IWD performed worse than MTUM by 5.97% 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 Coinbase. I've started allocating a small amount of assets to the growing crypto space and Coinbase has just been a breeze to use. Once you register, make sure to also open an Coinbase Pro account to buy crypto at the lowest fees on the market (just 0.1%!).
To see all of my most up-to-date recommendations, check out the Recommended Tools section.