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MTUM vs. IWS: What’s The Difference?

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

The expense ratio of MTUM is 0.08 percentage points lower than IWS’s (0.15% vs. 0.23%). MTUM also has a higher exposure to the financial services sector and a lower standard deviation. Overall, MTUM has provided higher returns than IWS over the past 7 years.

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

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Summary

MTUMIWS
NameiShares MSCI USA Momentum Factor ETFiShares Russell Mid-Cap Value ETF
CategoryLarge GrowthMid-Cap Value
IssueriSharesiShares
AUM14.53B14.24B
Avg. Return17.37%12.35%
Div. Yield0.44%1.34%
Expense Ratio0.15%0.23%

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 Value ETF (IWS) is a Mid-Cap Value fund that is issued by iShares. It currently has 14.24B total assets under management and has yielded an average annual return of 12.35% over the past 10 years. The fund has a dividend yield of 1.34% with an expense ratio of 0.23%.

MTUM’s dividend yield is 0.90% lower than that of IWS (0.44% vs. 1.34%). Also, MTUM yielded on average 5.02% more per year over the past decade (17.37% vs. 12.35%). The expense ratio of MTUM is 0.08 percentage points lower than IWS’s (0.15% vs. 0.23%).

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Fund Composition

Industry Exposure

MTUM vs. IWS - Industry Exposure

MTUMIWS
Technology15.24%11.39%
Industrials12.47%14.6%
Energy1.77%4.71%
Communication Services13.18%4.08%
Utilities0.19%6.97%
Healthcare6.41%8.56%
Consumer Defensive2.88%4.76%
Real Estate0.43%11.71%
Financial Services34.32%15.75%
Consumer Cyclical9.96%12.07%
Basic Materials3.15%5.4%

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 Value ETF (IWS) has the most exposure to the Financial Services sector at 15.75%. This is followed by Industrials and Consumer Cyclical at 14.6% and 12.07% respectively. Energy (4.71%), Consumer Defensive (4.76%), and Basic Materials (5.4%) only make up 14.87% of the fund’s total assets.

IWS’s mid-section with moderate exposure is comprised of Utilities, Healthcare, Technology, Real Estate, and Consumer Cyclical stocks at 6.97%, 8.56%, 11.39%, 11.71%, and 12.07%.

MTUM is 18.57% more exposed to the Financial Services sector than IWS (34.32% vs 15.75%). MTUM’s exposure to Technology and Communication Services stocks is 3.85% higher and 9.10% higher respectively (15.24% vs. 11.39% and 13.18% vs. 4.08%). In total, Real Estate, Energy, and Consumer Defensive also make up 16.10% less of the fund’s holdings compared to IWS (5.08% vs. 21.18%).

Holdings

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%.

IWS - Holdings

IWS HoldingsWeight
Twitter Inc0.69%
Marvell Technology Inc0.69%
IHS Markit Ltd0.62%
Prudential Financial Inc0.56%
Otis Worldwide Corp Ordinary Shares0.54%
International Flavors & Fragrances Inc0.53%
Xcel Energy Inc0.52%
Motorola Solutions Inc0.52%
Aptiv PLC0.52%
Aflac Inc0.52%

IWS’s Top Holdings are Twitter Inc, Marvell Technology Inc, IHS Markit Ltd, Prudential Financial Inc, and Otis Worldwide Corp Ordinary Shares at 0.69%, 0.69%, 0.62%, 0.56%, and 0.54%.

International Flavors & Fragrances Inc (0.53%), Xcel Energy Inc (0.52%), and Motorola Solutions Inc (0.52%) have a slightly smaller but still significant weight. Aptiv PLC and Aflac Inc are also represented in the IWS’s holdings at 0.52% and 0.52%.

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Risk Analysis

MTUMIWS
Mean Return01.06
R-squared087.04
Std. Deviation016.03
Alpha0-4.11
Beta01.1
Sharpe Ratio00.75
Treynor Ratio010.3

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

The iShares Russell Mid-Cap Value ETF (IWS) has a Beta of 1.1 with a Standard Deviation of 16.03 and a R-squared of 87.04. Its Treynor Ratio is 10.3 while IWS’s Mean Return is 1.06. Furthermore, the fund has a Sharpe Ratio of 0.75 and a Alpha of -4.11.

MTUM’s Mean Return is 1.06 points lower than that of IWS and its R-squared is 87.04 points lower. With a Standard Deviation of 0, MTUM is slightly less volatile than IWS. The Alpha and Beta of MTUM are 4.11 points higher and 1.10 points lower than IWS’s Alpha and Beta.

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Performance

Annual Returns

MTUM vs. IWS - Annual Returns

YearMTUMIWS
202029.69%4.76%
201927.57%26.78%
2018-1.77%-12.36%
201737.6%13.1%
20164.89%19.69%
20159.12%-4.93%
201414.48%14.49%
20130.0%33.11%
20120.0%18.27%
20110.0%-1.55%
20100.0%24.46%

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 IWS, returning 33.11% on an annual basis. The poorest year for IWS in the last ten years was 2018, with a yield of -12.36%. Most years the iShares Russell Mid-Cap Value ETF has given investors modest returns, such as in 2017, 2014, and 2012, when gains were 13.1%, 14.49%, and 18.27% respectively.

Portfolio Growth

MTUM vs. IWS - Portfolio Growth

FundInitial BalanceFinal BalanceCAGR
MTUM$10,000$29,30117.37%
IWS$10,000$17,15012.35%

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 IWS, the end total would have been $17,150. This equates to a $7,150 profit over 7 years and a compound annual growth rate (CAGR) of 12.35%.

MTUM’s CAGR is 5.02 percentage points higher than that of IWS and as a result, would have yielded $12,151 more on a $10,000 investment. Thus, MTUM outperformed IWS by 5.02% annually.


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