The Vanguard FTSE Europe Index Fund ETF Shares (VGK) and the iShares MSCI USA Momentum Factor ETF (MTUM) are both among the Top 100 ETFs. VGK is a Vanguard Europe Stock fund and MTUM is a iShares Large Growth fund. So, what’s the difference between VGK and MTUM? And which fund is better?
The expense ratio of VGK is 0.07 percentage points lower than MTUM’s (0.08% vs. 0.15%). VGK also has a lower exposure to the financial services sector and a higher standard deviation. Overall, VGK has provided lower returns than MTUM over the past 7 years.
In this article, we’ll compare VGK vs. MTUM. We’ll look at holdings and performance, as well as at their industry exposure and risk metrics. Moreover, I’ll also discuss VGK’s and MTUM’s fund composition, annual returns, and portfolio growth and examine how these affect their overall returns.
Summary
| VGK | MTUM | |
| Name | Vanguard FTSE Europe Index Fund ETF Shares | iShares MSCI USA Momentum Factor ETF |
| Category | Europe Stock | Large Growth |
| Issuer | Vanguard | iShares |
| AUM | 25.7B | 14.53B |
| Avg. Return | 6.68% | 17.37% |
| Div. Yield | 2.52% | 0.44% |
| Expense Ratio | 0.08% | 0.15% |
The Vanguard FTSE Europe Index Fund ETF Shares (VGK) is a Europe Stock fund that is issued by Vanguard. It currently has 25.7B total assets under management and has yielded an average annual return of 6.68% over the past 10 years. The fund has a dividend yield of 2.52% with an expense ratio of 0.08%.
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%.
VGK’s dividend yield is 2.08% higher than that of MTUM (2.52% vs. 0.44%). Also, VGK yielded on average 10.69% less per year over the past decade (6.68% vs. 17.37%). The expense ratio of VGK is 0.07 percentage points lower than MTUM’s (0.08% vs. 0.15%).
Fund Composition
Industry Exposure
| VGK | MTUM | |
| Technology | 8.3% | 15.24% |
| Industrials | 15.58% | 12.47% |
| Energy | 4.3% | 1.77% |
| Communication Services | 5.09% | 13.18% |
| Utilities | 3.89% | 0.19% |
| Healthcare | 13.76% | 6.41% |
| Consumer Defensive | 11.39% | 2.88% |
| Real Estate | 2.57% | 0.43% |
| Financial Services | 15.85% | 34.32% |
| Consumer Cyclical | 11.6% | 9.96% |
| Basic Materials | 7.67% | 3.15% |
The Vanguard FTSE Europe Index Fund ETF Shares (VGK) has the most exposure to the Financial Services sector at 15.85%. This is followed by Industrials and Healthcare at 15.58% and 13.76% respectively. Utilities (3.89%), Energy (4.3%), and Communication Services (5.09%) only make up 13.28% of the fund’s total assets.
VGK’s mid-section with moderate exposure is comprised of Basic Materials, Technology, Consumer Defensive, Consumer Cyclical, and Healthcare stocks at 7.67%, 8.3%, 11.39%, 11.6%, and 13.76%.
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%.
VGK is 18.47% less exposed to the Financial Services sector than MTUM (15.85% vs 34.32%). VGK’s exposure to Industrials and Healthcare stocks is 3.11% higher and 7.35% higher respectively (15.58% vs. 12.47% and 13.76% vs. 6.41%). In total, Utilities, Energy, and Communication Services also make up 1.86% less of the fund’s holdings compared to MTUM (13.28% vs. 15.14%).
Holdings
| VGK Holdings | Weight |
| Nestle SA | 2.82% |
| ASML Holding NV | 2.2% |
| Roche Holding AG | 2.13% |
| LVMH Moet Hennessy Louis Vuitton SE | 1.58% |
| Novartis AG | 1.55% |
| AstraZeneca PLC | 1.27% |
| SAP SE | 1.25% |
| Unilever PLC | 1.23% |
| Novo Nordisk A/S B | 1.09% |
| Siemens AG | 0.96% |
VGK’s Top Holdings are Nestle SA, ASML Holding NV, Roche Holding AG, LVMH Moet Hennessy Louis Vuitton SE, and Novartis AG at 2.82%, 2.2%, 2.13%, 1.58%, and 1.55%.
AstraZeneca PLC (1.27%), SAP SE (1.25%), and Unilever PLC (1.23%) have a slightly smaller but still significant weight. Novo Nordisk A/S B and Siemens AG are also represented in the VGK’s holdings at 1.09% and 0.96%.
| 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
| VGK | MTUM | |
| Mean Return | 0.61 | 0 |
| R-squared | 92.76 | 0 |
| Std. Deviation | 16.65 | 0 |
| Alpha | 0.45 | 0 |
| Beta | 1.06 | 0 |
| Sharpe Ratio | 0.4 | 0 |
| Treynor Ratio | 5.12 | 0 |
The Vanguard FTSE Europe Index Fund ETF Shares (VGK) has a Alpha of 0.45 with a Sharpe Ratio of 0.4 and a Treynor Ratio of 5.12. Its Beta is 1.06 while VGK’s Mean Return is 0.61. Furthermore, the fund has a Standard Deviation of 16.65 and a R-squared of 92.76.
The iShares MSCI USA Momentum Factor ETF (MTUM) has a R-squared of 0 with a Sharpe Ratio of 0 and a Beta of 0. Its Standard Deviation is 0 while MTUM’s Treynor Ratio is 0. Furthermore, the fund has a Alpha of 0 and a Mean Return of 0.
VGK’s Mean Return is 0.61 points higher than that of MTUM and its R-squared is 92.76 points higher. With a Standard Deviation of 16.65, VGK is slightly more volatile than MTUM. The Alpha and Beta of VGK are 0.45 points higher and 1.06 points higher than MTUM’s Alpha and Beta.
Performance
Annual Returns
| Year | VGK | MTUM |
| 2020 | 6.5% | 29.69% |
| 2019 | 24.26% | 27.57% |
| 2018 | -14.79% | -1.77% |
| 2017 | 27.06% | 37.6% |
| 2016 | -0.59% | 4.89% |
| 2015 | -1.87% | 9.12% |
| 2014 | -6.56% | 14.48% |
| 2013 | 24.93% | 0.0% |
| 2012 | 21.01% | 0.0% |
| 2011 | -11.49% | 0.0% |
| 2010 | 5.01% | 0.0% |
VGK had its best year in 2017 with an annual return of 27.06%. VGK’s worst year over the past decade yielded -14.79% and occurred in 2018. In most years the Vanguard FTSE Europe Index Fund ETF Shares provided moderate returns such as in 2016, 2010, and 2020 where annual returns amounted to -0.59%, 5.01%, and 6.5% 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
| Fund | Initial Balance | Final Balance | CAGR |
| VGK | $10,000 | $13,060 | 6.68% |
| MTUM | $10,000 | $29,301 | 17.37% |
A $10,000 investment in VGK would have resulted in a final balance of $13,060. This is a profit of $3,060 over 7 years and amounts to a compound annual growth rate (CAGR) of 6.68%.
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%.
VGK’s CAGR is 10.69 percentage points lower than that of MTUM and as a result, would have yielded $16,241 less on a $10,000 investment. Thus, VGK performed worse than MTUM by 10.69% annually.
Current recommendations:
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)Personal Capital is simply the best tool out there to track your net worth and plan for financial freedom. Just their retirement planner alone has become an invaluable tool to keep myself on track financially. Try it out, it's free!
2) 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!
3) 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!).
4) Groundfloor is another great way to get exposure to the real estate sector by investing in short-term, high-yield real estate debt. Current returns are >10% and you can get started with just $10.
5) If you are interested in startup investing, check out Mainvest. I've started allocating a small amount of assets to invest in and support small businesses. Return targets are between 10-25% and you can start with just $100!
To see all of my most up-to-date recommendations, check out the Recommended Tools section.
I believe that money is just a means to an end: to be free to spend your time as you wish, to maximize your positive impact on the world.
