The iShares MSCI USA Min Vol Factor ETF (USMV) and the iShares MSCI USA Momentum Factor ETF (MTUM) are both among the Top 100 ETFs. USMV is a iShares Large Blend fund and MTUM is a iShares Large Growth fund. So, what’s the difference between USMV and MTUM? And which fund is better?
USMV and MTUM have the same expense ratio: 0.15%. USMV also has a higher exposure to the technology sector and a lower standard deviation. Overall, USMV has provided lower returns than MTUM over the past 7 years.
In this article, we’ll compare USMV vs. MTUM. We’ll look at annual returns and portfolio growth, as well as at their performance and fund composition. Moreover, I’ll also discuss USMV’s and MTUM’s industry exposure, holdings, and risk metrics and examine how these affect their overall returns.
|Name||iShares MSCI USA Min Vol Factor ETF||iShares MSCI USA Momentum Factor ETF|
|Category||Large Blend||Large Growth|
The iShares MSCI USA Min Vol Factor ETF (USMV) is a Large Blend fund that is issued by iShares. It currently has 27.6B total assets under management and has yielded an average annual return of 13.89% over the past 10 years. The fund has a dividend yield of 1.5% 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%.
USMV’s dividend yield is 1.06% higher than that of MTUM (1.5% vs. 0.44%). Also, USMV yielded on average 3.47% less per year over the past decade (13.89% vs. 17.37%). USMV and MTUM have the same expense ratio: 0.15%.
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The iShares MSCI USA Min Vol Factor ETF (USMV) has the most exposure to the Technology sector at 20.53%. This is followed by Healthcare and Consumer Defensive at 18.42% and 12.82% respectively. Basic Materials (1.65%), Real Estate (2.73%), and Consumer Cyclical (5.53%) only make up 9.91% of the fund’s total assets.
USMV’s mid-section with moderate exposure is comprised of Utilities, Financial Services, Industrials, Communication Services, and Consumer Defensive stocks at 6.93%, 9.65%, 10.51%, 11.03%, and 12.82%.
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%.
USMV is 5.29% more exposed to the Technology sector than MTUM (20.53% vs 15.24%). USMV’s exposure to Healthcare and Consumer Defensive stocks is 12.01% higher and 9.94% higher respectively (18.42% vs. 6.41% and 12.82% vs. 2.88%). In total, Basic Materials, Real Estate, and Consumer Cyclical also make up 3.63% less of the fund’s holdings compared to MTUM (9.91% vs. 13.54%).
|Eli Lilly and Co||1.64%|
|T-Mobile US Inc||1.51%|
|Accenture PLC Class A||1.51%|
|Visa Inc Class A||1.49%|
|Waste Management Inc||1.45%|
|The Kroger Co||1.44%|
|Johnson & Johnson||1.42%|
|Gilead Sciences Inc||1.42%|
USMV’s Top Holdings are Eli Lilly and Co, Microsoft Corp, T-Mobile US Inc, Accenture PLC Class A, and Visa Inc Class A at 1.64%, 1.62%, 1.51%, 1.51%, and 1.49%.
Waste Management Inc (1.45%), Adobe Inc (1.45%), and The Kroger Co (1.44%) have a slightly smaller but still significant weight. Johnson & Johnson and Gilead Sciences Inc are also represented in the USMV’s holdings at 1.42% and 1.42%.
|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%.
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The iShares MSCI USA Min Vol Factor ETF (USMV) has a Alpha of 0 with a Beta of 0 and a Standard Deviation of 0. Its Mean Return is 0 while USMV’s Treynor Ratio is 0. Furthermore, the fund has a R-squared of 0 and a Sharpe Ratio of 0.
The iShares MSCI USA Momentum Factor ETF (MTUM) has a Treynor Ratio of 0 with a Sharpe Ratio of 0 and a Beta of 0. Its Alpha is 0 while MTUM’s R-squared is 0. Furthermore, the fund has a Mean Return of 0 and a Standard Deviation of 0.
USMV’s Mean Return is 0.00 points lower than that of MTUM and its R-squared is 0.00 points lower. With a Standard Deviation of 0, USMV is slightly less volatile than MTUM. The Alpha and Beta of USMV are 0.00 points lower and 0.00 points lower than MTUM’s Alpha and Beta.
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USMV had its best year in 2019 with an annual return of 27.77%. USMV’s worst year over the past decade yielded 0.0% and occurred in 2011. In most years the iShares MSCI USA Min Vol Factor ETF provided moderate returns such as in 2020, 2016, and 2012 where annual returns amounted to 5.6%, 10.5%, and 11.04% 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 USMV would have resulted in a final balance of $22,066. This is a profit of $12,066 over 7 years and amounts to a compound annual growth rate (CAGR) of 13.89%.
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%.
USMV’s CAGR is 3.47 percentage points lower than that of MTUM and as a result, would have yielded $7,235 less on a $10,000 investment. Thus, USMV performed worse than MTUM by 3.47% annually.
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