IWR vs. MTUM: What’s The Difference?

The iShares Russell Mid-Cap ETF (IWR) and the iShares MSCI USA Momentum Factor ETF (MTUM) are both among the Top 100 ETFs. IWR is a iShares Mid-Cap Blend fund and MTUM is a iShares Large Growth fund. So, what’s the difference between IWR and MTUM? And which fund is better?

The expense ratio of IWR is 0.04 percentage points higher than MTUM’s (0.19% vs. 0.15%). IWR also has a higher exposure to the technology sector and a higher standard deviation. Overall, IWR has provided lower returns than MTUM over the past ten years.

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

Summary

IWR MTUM
Name iShares Russell Mid-Cap ETF iShares MSCI USA Momentum Factor ETF
Category Mid-Cap Blend Large Growth
Issuer iShares iShares
AUM 29.84B 14.53B
Avg. Return 14.15% 17.37%
Div. Yield 0.99% 0.44%
Expense Ratio 0.19% 0.15%

The iShares Russell Mid-Cap ETF (IWR) is a Mid-Cap Blend fund that is issued by iShares. It currently has 29.84B total assets under management and has yielded an average annual return of 14.15% over the past 10 years. The fund has a dividend yield of 0.99% 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%.

IWR’s dividend yield is 0.55% higher than that of MTUM (0.99% vs. 0.44%). Also, IWR yielded on average 3.22% less per year over the past decade (14.15% vs. 17.37%). The expense ratio of IWR is 0.04 percentage points higher than MTUM’s (0.19% vs. 0.15%).

Fund Composition

Industry Exposure

IWR vs. MTUM - Industry Exposure

IWR MTUM
Technology 19.67% 15.24%
Industrials 14.54% 12.47%
Energy 3.48% 1.77%
Communication Services 4.64% 13.18%
Utilities 4.46% 0.19%
Healthcare 11.76% 6.41%
Consumer Defensive 3.82% 2.88%
Real Estate 8.31% 0.43%
Financial Services 11.64% 34.32%
Consumer Cyclical 13.59% 9.96%
Basic Materials 4.1% 3.15%

The iShares Russell Mid-Cap ETF (IWR) has the most exposure to the Technology sector at 19.67%. This is followed by Industrials and Consumer Cyclical at 14.54% and 13.59% respectively. Consumer Defensive (3.82%), Basic Materials (4.1%), and Utilities (4.46%) only make up 12.38% of the fund’s total assets.

IWR’s mid-section with moderate exposure is comprised of Communication Services, Real Estate, Financial Services, Healthcare, and Consumer Cyclical stocks at 4.64%, 8.31%, 11.64%, 11.76%, 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%.

IWR is 4.43% more exposed to the Technology sector than MTUM (19.67% vs 15.24%). IWR’s exposure to Industrials and Consumer Cyclical stocks is 2.07% higher and 3.63% higher respectively (14.54% vs. 12.47% and 13.59% vs. 9.96%). In total, Consumer Defensive, Basic Materials, and Utilities also make up 6.16% more of the fund’s holdings compared to MTUM (12.38% vs. 6.22%).

Holdings

IWR - Holdings

IWR Holdings Weight
IDEXX Laboratories Inc 0.51%
DocuSign Inc 0.51%
Twitter Inc 0.48%
Chipotle Mexican Grill Inc 0.47%
Roku Inc Class A 0.44%
Marvell Technology Inc 0.44%
DexCom Inc 0.44%
Trane Technologies PLC 0.43%
MSCI Inc 0.43%
Carrier Global Corp Ordinary Shares 0.43%

IWR’s Top Holdings are IDEXX Laboratories Inc, DocuSign Inc, Twitter Inc, Chipotle Mexican Grill Inc, and Roku Inc Class A at 0.51%, 0.51%, 0.48%, 0.47%, and 0.44%.

Marvell Technology Inc (0.44%), DexCom Inc (0.44%), and Trane Technologies PLC (0.43%) have a slightly smaller but still significant weight. MSCI Inc and Carrier Global Corp Ordinary Shares are also represented in the IWR’s holdings at 0.43% and 0.43%.

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

IWR MTUM
Mean Return 1.17 0
R-squared 91.52 0
Std. Deviation 15.66 0
Alpha -2.8 0
Beta 1.11 0
Sharpe Ratio 0.86 0
Treynor Ratio 11.72 0

The iShares Russell Mid-Cap ETF (IWR) has a R-squared of 91.52 with a Standard Deviation of 15.66 and a Treynor Ratio of 11.72. Its Mean Return is 1.17 while IWR’s Alpha is -2.8. Furthermore, the fund has a Sharpe Ratio of 0.86 and a Beta of 1.11.

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

IWR’s Mean Return is 1.17 points higher than that of MTUM and its R-squared is 91.52 points higher. With a Standard Deviation of 15.66, IWR is slightly more volatile than MTUM. The Alpha and Beta of IWR are 2.80 points lower and 1.11 points higher than MTUM’s Alpha and Beta.

Performance

Annual Returns

IWR vs. MTUM - Annual Returns

Year IWR MTUM
2020 16.91% 29.69%
2019 30.31% 27.57%
2018 -9.13% -1.77%
2017 18.32% 37.6%
2016 13.58% 4.89%
2015 -2.57% 9.12%
2014 13.03% 14.48%
2013 34.5% 0.0%
2012 17.13% 0.0%
2011 -1.67% 0.0%
2010 25.25% 0.0%

IWR had its best year in 2013 with an annual return of 34.5%. IWR’s worst year over the past decade yielded -9.13% and occurred in 2018. In most years the iShares Russell Mid-Cap ETF provided moderate returns such as in 2016, 2020, and 2012 where annual returns amounted to 13.58%, 16.91%, and 17.13% 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

IWR vs. MTUM - Portfolio Growth

Fund Initial Balance Final Balance CAGR
IWR $10,000 $20,487 14.15%
MTUM $10,000 $29,301 17.37%

A $10,000 investment in IWR would have resulted in a final balance of $20,487. This is a profit of $10,487 over 7 years and amounts to a compound annual growth rate (CAGR) of 14.15%.

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%.

IWR’s CAGR is 3.22 percentage points lower than that of MTUM and as a result, would have yielded $8,814 less on a $10,000 investment. Thus, IWR performed worse than MTUM by 3.22% annually.


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