Skip to content

VUG vs. MTUM: What’s The Difference?

The Vanguard Growth Index Fund ETF Shares (VUG) and the iShares MSCI USA Momentum Factor ETF (MTUM) are both among the Top 100 ETFs. VUG is a Vanguard Large Growth fund and MTUM is a iShares Large Growth fund. So, what’s the difference between VUG and MTUM? And which fund is better?

The expense ratio of VUG is 0.11 percentage points lower than MTUM’s (0.04% vs. 0.15%). VUG also has a higher exposure to the technology sector and a higher standard deviation. Overall, VUG has provided higher returns than MTUM over the past ten years.

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

TIP: Keep track of all your investments with Personal Capital. I use this amazing tool to aggregate all investments in one place and make sure I'm on track to financial freedom. Oh, and did I mention it's free? Try it out here (link to Personal Capital).

Summary

VUGMTUM
NameVanguard Growth Index Fund ETF SharesiShares MSCI USA Momentum Factor ETF
CategoryLarge GrowthLarge Growth
IssuerVanguardiShares
AUM165.53B14.53B
Avg. Return17.58%17.37%
Div. Yield0.57%0.44%
Expense Ratio0.04%0.15%

The Vanguard Growth Index Fund ETF Shares (VUG) is a Large Growth fund that is issued by Vanguard. It currently has 165.53B total assets under management and has yielded an average annual return of 17.58% over the past 10 years. The fund has a dividend yield of 0.57% with an expense ratio of 0.04%.

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%.

VUG’s dividend yield is 0.13% higher than that of MTUM (0.57% vs. 0.44%). Also, VUG yielded on average 0.21% more per year over the past decade (17.58% vs. 17.37%). The expense ratio of VUG is 0.11 percentage points lower than MTUM’s (0.04% vs. 0.15%).

FYI: The best way I've found to invest in ETFs is through M1 Finance. It's free and you even get an instant line of credit! Have a look here (link to M1 Finance).

Fund Composition

Industry Exposure

VUG vs. MTUM - Industry Exposure

VUGMTUM
Technology39.05%15.24%
Industrials5.13%12.47%
Energy0.32%1.77%
Communication Services16.49%13.18%
Utilities0.0%0.19%
Healthcare8.09%6.41%
Consumer Defensive2.41%2.88%
Real Estate2.46%0.43%
Financial Services6.75%34.32%
Consumer Cyclical17.78%9.96%
Basic Materials1.52%3.15%

The Vanguard Growth Index Fund ETF Shares (VUG) has the most exposure to the Technology sector at 39.05%. This is followed by Consumer Cyclical and Communication Services at 17.78% and 16.49% respectively. Energy (0.32%), Basic Materials (1.52%), and Consumer Defensive (2.41%) only make up 4.25% of the fund’s total assets.

VUG’s mid-section with moderate exposure is comprised of Real Estate, Industrials, Financial Services, Healthcare, and Communication Services stocks at 2.46%, 5.13%, 6.75%, 8.09%, and 16.49%.

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%.

VUG is 23.81% more exposed to the Technology sector than MTUM (39.05% vs 15.24%). VUG’s exposure to Consumer Cyclical and Communication Services stocks is 7.82% higher and 3.31% higher respectively (17.78% vs. 9.96% and 16.49% vs. 13.18%). In total, Energy, Basic Materials, and Consumer Defensive also make up 3.55% less of the fund’s holdings compared to MTUM (4.25% vs. 7.80%).

Holdings

VUG - Holdings

VUG HoldingsWeight
Apple Inc10.13%
Microsoft Corp9.52%
Amazon.com Inc6.88%
Facebook Inc Class A3.89%
Alphabet Inc Class A3.43%
Alphabet Inc Class C3.22%
Tesla Inc2.44%
NVIDIA Corp2.21%
Visa Inc Class A1.78%
PayPal Holdings Inc1.6%

VUG’s Top Holdings are Apple Inc, Microsoft Corp, Amazon.com Inc, Facebook Inc Class A, and Alphabet Inc Class A at 10.13%, 9.52%, 6.88%, 3.89%, and 3.43%.

Alphabet Inc Class C (3.22%), Tesla Inc (2.44%), and NVIDIA Corp (2.21%) have a slightly smaller but still significant weight. Visa Inc Class A and PayPal Holdings Inc are also represented in the VUG’s holdings at 1.78% and 1.6%.

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%.

NOTE: The easiest way to add diversification to your portfolio is to invest in real estate through Fundrise. You can become private real estate investor without the burden of property management! Check it out here (link to Fundrise).

Risk Analysis

VUGMTUM
Mean Return1.440
R-squared92.480
Std. Deviation14.760
Alpha1.810
Beta1.040
Sharpe Ratio1.130
Treynor Ratio16.130

The Vanguard Growth Index Fund ETF Shares (VUG) has a Treynor Ratio of 16.13 with a Alpha of 1.81 and a Beta of 1.04. Its Mean Return is 1.44 while VUG’s Standard Deviation is 14.76. Furthermore, the fund has a Sharpe Ratio of 1.13 and a R-squared of 92.48.

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

VUG’s Mean Return is 1.44 points higher than that of MTUM and its R-squared is 92.48 points higher. With a Standard Deviation of 14.76, VUG is slightly more volatile than MTUM. The Alpha and Beta of VUG are 1.81 points higher and 1.04 points higher than MTUM’s Alpha and Beta.

FYI: Another great way to get exposure to the real estate sector is by investing in real estate debt. Groundfloor offers fantastic short-term, high-yield bonds that can add diversification to your portfolio!

Performance

Annual Returns

VUG vs. MTUM - Annual Returns

YearVUGMTUM
202040.16%29.69%
201937.26%27.57%
2018-3.32%-1.77%
201727.8%37.6%
20166.13%4.89%
20153.32%9.12%
201413.62%14.48%
201332.38%0.0%
201217.03%0.0%
20111.87%0.0%
201017.11%0.0%

VUG had its best year in 2020 with an annual return of 40.16%. VUG’s worst year over the past decade yielded -3.32% and occurred in 2018. In most years the Vanguard Growth Index Fund ETF Shares provided moderate returns such as in 2014, 2012, and 2010 where annual returns amounted to 13.62%, 17.03%, and 17.11% 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

VUG vs. MTUM - Portfolio Growth

FundInitial BalanceFinal BalanceCAGR
VUG$10,000$29,61517.58%
MTUM$10,000$29,30117.37%

A $10,000 investment in VUG would have resulted in a final balance of $29,615. This is a profit of $19,615 over 7 years and amounts to a compound annual growth rate (CAGR) of 17.58%.

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%.

VUG’s CAGR is 0.21 percentage points higher than that of MTUM and as a result, would have yielded $314 more on a $10,000 investment. Thus, VUG outperformed MTUM by 0.21% 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.

Leave a Reply

Your email address will not be published.