VV vs. MTUM: What’s The Difference?

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

The expense ratio of VV is 0.11 percentage points lower than MTUM’s (0.04% vs. 0.15%). VV also has a higher exposure to the technology sector and a higher standard deviation. Overall, VV has provided lower returns than MTUM over the past 7 years.

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

Summary

VV MTUM
Name Vanguard Large-Cap Index Fund ETF Shares iShares MSCI USA Momentum Factor ETF
Category Large Blend Large Growth
Issuer Vanguard iShares
AUM 37.65B 14.53B
Avg. Return 14.75% 17.37%
Div. Yield 1.26% 0.44%
Expense Ratio 0.04% 0.15%

The Vanguard Large-Cap Index Fund ETF Shares (VV) is a Large Blend fund that is issued by Vanguard. It currently has 37.65B total assets under management and has yielded an average annual return of 14.75% over the past 10 years. The fund has a dividend yield of 1.26% 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%.

VV’s dividend yield is 0.82% higher than that of MTUM (1.26% vs. 0.44%). Also, VV yielded on average 2.62% less per year over the past decade (14.75% vs. 17.37%). The expense ratio of VV is 0.11 percentage points lower than MTUM’s (0.04% vs. 0.15%).

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Fund Composition

Industry Exposure

VV vs. MTUM - Industry Exposure

VV MTUM
Technology 25.38% 15.24%
Industrials 8.39% 12.47%
Energy 2.62% 1.77%
Communication Services 11.68% 13.18%
Utilities 2.35% 0.19%
Healthcare 13.22% 6.41%
Consumer Defensive 6.06% 2.88%
Real Estate 2.7% 0.43%
Financial Services 13.82% 34.32%
Consumer Cyclical 11.65% 9.96%
Basic Materials 2.13% 3.15%

The Vanguard Large-Cap Index Fund ETF Shares (VV) has the most exposure to the Technology sector at 25.38%. This is followed by Financial Services and Healthcare at 13.82% and 13.22% respectively. Utilities (2.35%), Energy (2.62%), and Real Estate (2.7%) only make up 7.67% of the fund’s total assets.

VV’s mid-section with moderate exposure is comprised of Consumer Defensive, Industrials, Consumer Cyclical, Communication Services, and Healthcare stocks at 6.06%, 8.39%, 11.65%, 11.68%, and 13.22%.

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%.

VV is 10.14% more exposed to the Technology sector than MTUM (25.38% vs 15.24%). VV’s exposure to Financial Services and Healthcare stocks is 20.50% lower and 6.81% higher respectively (13.82% vs. 34.32% and 13.22% vs. 6.41%). In total, Utilities, Energy, and Real Estate also make up 5.28% more of the fund’s holdings compared to MTUM (7.67% vs. 2.39%).

Holdings

VV - Holdings

VV Holdings Weight
Apple Inc 5.7%
Microsoft Corp 5.35%
Amazon.com Inc 3.87%
Facebook Inc Class A 2.19%
Alphabet Inc Class A 1.93%
Alphabet Inc Class C 1.81%
Tesla Inc 1.37%
Berkshire Hathaway Inc Class B 1.3%
NVIDIA Corp 1.24%
JPMorgan Chase & Co 1.24%

VV’s Top Holdings are Apple Inc, Microsoft Corp, Amazon.com Inc, Facebook Inc Class A, and Alphabet Inc Class A at 5.7%, 5.35%, 3.87%, 2.19%, and 1.93%.

Alphabet Inc Class C (1.81%), Tesla Inc (1.37%), and Berkshire Hathaway Inc Class B (1.3%) have a slightly smaller but still significant weight. NVIDIA Corp and JPMorgan Chase & Co are also represented in the VV’s holdings at 1.24% and 1.24%.

MTUM - 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%.

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Risk Analysis

VV MTUM
Mean Return 1.24 0
R-squared 99.86 0
Std. Deviation 13.75 0
Alpha -0.08 0
Beta 1.01 0
Sharpe Ratio 1.04 0
Treynor Ratio 14.14 0

The Vanguard Large-Cap Index Fund ETF Shares (VV) has a Mean Return of 1.24 with a Alpha of -0.08 and a Treynor Ratio of 14.14. Its Sharpe Ratio is 1.04 while VV’s Beta is 1.01. Furthermore, the fund has a Standard Deviation of 13.75 and a R-squared of 99.86.

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

VV’s Mean Return is 1.24 points higher than that of MTUM and its R-squared is 99.86 points higher. With a Standard Deviation of 13.75, VV is slightly more volatile than MTUM. The Alpha and Beta of VV are 0.08 points lower and 1.01 points higher than MTUM’s Alpha and Beta.

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Performance

Annual Returns

VV vs. MTUM - Annual Returns

Year VV MTUM
2020 20.99% 29.69%
2019 31.39% 27.57%
2018 -4.44% -1.77%
2017 22.03% 37.6%
2016 11.65% 4.89%
2015 1.07% 9.12%
2014 13.39% 14.48%
2013 32.65% 0.0%
2012 16.09% 0.0%
2011 1.58% 0.0%
2010 15.81% 0.0%

VV had its best year in 2013 with an annual return of 32.65%. VV’s worst year over the past decade yielded -4.44% and occurred in 2018. In most years the Vanguard Large-Cap Index Fund ETF Shares provided moderate returns such as in 2014, 2010, and 2012 where annual returns amounted to 13.39%, 15.81%, and 16.09% 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

VV vs. MTUM - Portfolio Growth

Fund Initial Balance Final Balance CAGR
VV $10,000 $23,719 14.75%
MTUM $10,000 $29,301 17.37%

A $10,000 investment in VV would have resulted in a final balance of $23,719. This is a profit of $13,719 over 7 years and amounts to a compound annual growth rate (CAGR) of 14.75%.

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%.

VV’s CAGR is 2.62 percentage points lower than that of MTUM and as a result, would have yielded $5,582 less on a $10,000 investment. Thus, VV performed worse than MTUM by 2.62% annually.


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