The iShares MSCI USA Momentum Factor ETF (MTUM) and the iShares Russell Mid-Cap Growth ETF (IWP) are both among the Top 100 ETFs. MTUM is a iShares Large Growth fund and IWP is a iShares Mid-Cap Growth fund. So, what’s the difference between MTUM and IWP? And which fund is better?
The expense ratio of MTUM is 0.09 percentage points lower than IWP’s (0.15% vs. 0.24%). MTUM also has a higher exposure to the financial services sector and a lower standard deviation. Overall, MTUM has provided higher returns than IWP over the past 7 years.
In this article, we’ll compare MTUM vs. IWP. We’ll look at fund composition and performance, as well as at their risk metrics and annual returns. Moreover, I’ll also discuss MTUM’s and IWP’s holdings, portfolio growth, and industry exposure and examine how these affect their overall returns.
Summary
| MTUM | IWP | |
| Name | iShares MSCI USA Momentum Factor ETF | iShares Russell Mid-Cap Growth ETF |
| Category | Large Growth | Mid-Cap Growth |
| Issuer | iShares | iShares |
| AUM | 14.53B | 15.7B |
| Avg. Return | 17.37% | 16.75% |
| Div. Yield | 0.44% | 0.26% |
| Expense Ratio | 0.15% | 0.24% |
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%.
The iShares Russell Mid-Cap Growth ETF (IWP) is a Mid-Cap Growth fund that is issued by iShares. It currently has 15.7B total assets under management and has yielded an average annual return of 16.75% over the past 10 years. The fund has a dividend yield of 0.26% with an expense ratio of 0.24%.
MTUM’s dividend yield is 0.18% higher than that of IWP (0.44% vs. 0.26%). Also, MTUM yielded on average 0.62% more per year over the past decade (17.37% vs. 16.75%). The expense ratio of MTUM is 0.09 percentage points lower than IWP’s (0.15% vs. 0.24%).
Fund Composition
Industry Exposure
| MTUM | IWP | |
| Technology | 15.24% | 33.88% |
| Industrials | 12.47% | 14.09% |
| Energy | 1.77% | 1.51% |
| Communication Services | 13.18% | 6.32% |
| Utilities | 0.19% | 0.16% |
| Healthcare | 6.41% | 16.79% |
| Consumer Defensive | 2.88% | 2.32% |
| Real Estate | 0.43% | 2.46% |
| Financial Services | 34.32% | 4.52% |
| Consumer Cyclical | 9.96% | 16.09% |
| Basic Materials | 3.15% | 1.86% |
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%.
The iShares Russell Mid-Cap Growth ETF (IWP) has the most exposure to the Technology sector at 33.88%. This is followed by Healthcare and Consumer Cyclical at 16.79% and 16.09% respectively. Energy (1.51%), Basic Materials (1.86%), and Consumer Defensive (2.32%) only make up 5.69% of the fund’s total assets.
IWP’s mid-section with moderate exposure is comprised of Real Estate, Financial Services, Communication Services, Industrials, and Consumer Cyclical stocks at 2.46%, 4.52%, 6.32%, 14.09%, and 16.09%.
MTUM is 29.80% more exposed to the Financial Services sector than IWP (34.32% vs 4.52%). MTUM’s exposure to Technology and Communication Services stocks is 18.64% lower and 6.86% higher respectively (15.24% vs. 33.88% and 13.18% vs. 6.32%). In total, Real Estate, Energy, and Consumer Defensive also make up 1.21% less of the fund’s holdings compared to IWP (5.08% vs. 6.29%).
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%.
| IWP Holdings | Weight |
| IDEXX Laboratories Inc | 1.3% |
| DocuSign Inc | 1.3% |
| Roku Inc Class A | 1.29% |
| Match Group Inc | 1.06% |
| Chipotle Mexican Grill Inc | 1.06% |
| Pinterest Inc | 1.05% |
| Veeva Systems Inc Class A | 1.04% |
| Palantir Technologies Inc Ordinary Shares – Class A | 1.04% |
| Lululemon Athletica Inc | 1.01% |
| DexCom Inc | 1.0% |
IWP’s Top Holdings are IDEXX Laboratories Inc, DocuSign Inc, Roku Inc Class A, Match Group Inc, and Chipotle Mexican Grill Inc at 1.3%, 1.3%, 1.29%, 1.06%, and 1.06%.
Pinterest Inc (1.05%), Veeva Systems Inc Class A (1.04%), and Palantir Technologies Inc Ordinary Shares – Class A (1.04%) have a slightly smaller but still significant weight. Lululemon Athletica Inc and DexCom Inc are also represented in the IWP’s holdings at 1.01% and 1.0%.
Risk Analysis
| MTUM | IWP | |
| Mean Return | 0 | 1.27 |
| R-squared | 0 | 87.01 |
| Std. Deviation | 0 | 16.05 |
| Alpha | 0 | -1.03 |
| Beta | 0 | 1.1 |
| Sharpe Ratio | 0 | 0.91 |
| Treynor Ratio | 0 | 12.98 |
The iShares MSCI USA Momentum Factor ETF (MTUM) has a Mean Return of 0 with a Sharpe Ratio of 0 and a Treynor Ratio of 0. Its Alpha is 0 while MTUM’s Beta is 0. Furthermore, the fund has a Standard Deviation of 0 and a R-squared of 0.
The iShares Russell Mid-Cap Growth ETF (IWP) has a Beta of 1.1 with a Mean Return of 1.27 and a Standard Deviation of 16.05. Its Alpha is -1.03 while IWP’s Sharpe Ratio is 0.91. Furthermore, the fund has a Treynor Ratio of 12.98 and a R-squared of 87.01.
MTUM’s Mean Return is 1.27 points lower than that of IWP and its R-squared is 87.01 points lower. With a Standard Deviation of 0, MTUM is slightly less volatile than IWP. The Alpha and Beta of MTUM are 1.03 points higher and 1.10 points lower than IWP’s Alpha and Beta.
Performance
Annual Returns
| Year | MTUM | IWP |
| 2020 | 29.69% | 35.29% |
| 2019 | 27.57% | 35.14% |
| 2018 | -1.77% | -4.95% |
| 2017 | 37.6% | 24.98% |
| 2016 | 4.89% | 7.15% |
| 2015 | 9.12% | -0.39% |
| 2014 | 14.48% | 11.68% |
| 2013 | 0.0% | 35.44% |
| 2012 | 0.0% | 15.62% |
| 2011 | 0.0% | -1.82% |
| 2010 | 0.0% | 26.1% |
MTUM had its best year in 2017 with an annual return of 37.6%. MTUM’s worst year over the past decade yielded -1.77% and occurred in 2018. In most years the iShares MSCI USA Momentum Factor ETF provided moderate returns such as in 2010, 2016, and 2015 where annual returns amounted to 0.0%, 4.89%, and 9.12% respectively.
The year 2013 was the strongest year for IWP, returning 35.44% on an annual basis. The poorest year for IWP in the last ten years was 2018, with a yield of -4.95%. Most years the iShares Russell Mid-Cap Growth ETF has given investors modest returns, such as in 2014, 2012, and 2017, when gains were 11.68%, 15.62%, and 24.98% respectively.
Portfolio Growth
| Fund | Initial Balance | Final Balance | CAGR |
| MTUM | $10,000 | $29,301 | 17.37% |
| IWP | $10,000 | $25,888 | 16.75% |
A $10,000 investment in MTUM would have resulted in a final balance of $29,301. This is a profit of $19,301 over 7 years and amounts to a compound annual growth rate (CAGR) of 17.37%.
With a $10,000 investment in IWP, the end total would have been $25,888. This equates to a $15,888 profit over 7 years and a compound annual growth rate (CAGR) of 16.75%.
MTUM’s CAGR is 0.62 percentage points higher than that of IWP and as a result, would have yielded $3,413 more on a $10,000 investment. Thus, MTUM outperformed IWP by 0.62% annually.
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