The Vanguard Extended Market Index Fund ETF Shares (VXF) and the iShares MSCI USA Momentum Factor ETF (MTUM) are both among the Top 100 ETFs. VXF is a Vanguard Mid-Cap Growth fund and MTUM is a iShares Large Growth fund. So, what’s the difference between VXF and MTUM? And which fund is better?
The expense ratio of VXF is 0.09 percentage points lower than MTUM’s (0.06% vs. 0.15%). VXF also has a higher exposure to the technology sector and a higher standard deviation. Overall, VXF has provided lower returns than MTUM over the past 7 years.
In this article, we’ll compare VXF vs. MTUM. We’ll look at industry exposure and fund composition, as well as at their performance and risk metrics. Moreover, I’ll also discuss VXF’s and MTUM’s annual returns, portfolio growth, and holdings and examine how these affect their overall returns.
Summary
| VXF | MTUM | |
| Name | Vanguard Extended Market Index Fund ETF Shares | iShares MSCI USA Momentum Factor ETF |
| Category | Mid-Cap Growth | Large Growth |
| Issuer | Vanguard | iShares |
| AUM | 114.53B | 14.53B |
| Avg. Return | 15.47% | 17.37% |
| Div. Yield | 1.19% | 0.44% |
| Expense Ratio | 0.06% | 0.15% |
The Vanguard Extended Market Index Fund ETF Shares (VXF) is a Mid-Cap Growth fund that is issued by Vanguard. It currently has 114.53B total assets under management and has yielded an average annual return of 15.47% over the past 10 years. The fund has a dividend yield of 1.19% with an expense ratio of 0.06%.
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%.
VXF’s dividend yield is 0.75% higher than that of MTUM (1.19% vs. 0.44%). Also, VXF yielded on average 1.90% less per year over the past decade (15.47% vs. 17.37%). The expense ratio of VXF is 0.09 percentage points lower than MTUM’s (0.06% vs. 0.15%).
Fund Composition
Industry Exposure
| VXF | MTUM | |
| Technology | 23.61% | 15.24% |
| Industrials | 11.31% | 12.47% |
| Energy | 2.46% | 1.77% |
| Communication Services | 7.29% | 13.18% |
| Utilities | 1.65% | 0.19% |
| Healthcare | 15.25% | 6.41% |
| Consumer Defensive | 3.09% | 2.88% |
| Real Estate | 8.16% | 0.43% |
| Financial Services | 12.56% | 34.32% |
| Consumer Cyclical | 11.35% | 9.96% |
| Basic Materials | 3.26% | 3.15% |
The Vanguard Extended Market Index Fund ETF Shares (VXF) has the most exposure to the Technology sector at 23.61%. This is followed by Healthcare and Financial Services at 15.25% and 12.56% respectively. Energy (2.46%), Consumer Defensive (3.09%), and Basic Materials (3.26%) only make up 8.81% of the fund’s total assets.
VXF’s mid-section with moderate exposure is comprised of Communication Services, Real Estate, Industrials, Consumer Cyclical, and Financial Services stocks at 7.29%, 8.16%, 11.31%, 11.35%, and 12.56%.
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%.
VXF is 8.37% more exposed to the Technology sector than MTUM (23.61% vs 15.24%). VXF’s exposure to Healthcare and Financial Services stocks is 8.84% higher and 21.76% lower respectively (15.25% vs. 6.41% and 12.56% vs. 34.32%). In total, Energy, Consumer Defensive, and Basic Materials also make up 1.01% more of the fund’s holdings compared to MTUM (8.81% vs. 7.80%).
Holdings
| VXF Holdings | Weight |
| Square Inc A | 1.2% |
| Zoom Video Communications Inc | 1.04% |
| Uber Technologies Inc | 0.93% |
| Moderna Inc | 0.9% |
| Blackstone Group Inc | 0.83% |
| Snap Inc Class A | 0.8% |
| Twilio Inc A | 0.73% |
| DocuSign Inc | 0.68% |
| CrowdStrike Holdings Inc Class A | 0.63% |
| Marvell Technology Inc | 0.6% |
VXF’s Top Holdings are Square Inc A, Zoom Video Communications Inc, Uber Technologies Inc, Moderna Inc, and Blackstone Group Inc at 1.2%, 1.04%, 0.93%, 0.9%, and 0.83%.
Snap Inc Class A (0.8%), Twilio Inc A (0.73%), and DocuSign Inc (0.68%) have a slightly smaller but still significant weight. CrowdStrike Holdings Inc Class A and Marvell Technology Inc are also represented in the VXF’s holdings at 0.63% and 0.6%.
| 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
| VXF | MTUM | |
| Mean Return | 1.24 | 0 |
| R-squared | 85.73 | 0 |
| Std. Deviation | 18.04 | 0 |
| Alpha | -3.26 | 0 |
| Beta | 1.23 | 0 |
| Sharpe Ratio | 0.79 | 0 |
| Treynor Ratio | 10.92 | 0 |
The Vanguard Extended Market Index Fund ETF Shares (VXF) has a Beta of 1.23 with a R-squared of 85.73 and a Mean Return of 1.24. Its Treynor Ratio is 10.92 while VXF’s Alpha is -3.26. Furthermore, the fund has a Standard Deviation of 18.04 and a Sharpe Ratio of 0.79.
The iShares MSCI USA Momentum Factor ETF (MTUM) has a Alpha of 0 with a Standard Deviation of 0 and a Sharpe Ratio of 0. Its Mean Return is 0 while MTUM’s R-squared is 0. Furthermore, the fund has a Treynor Ratio of 0 and a Beta of 0.
VXF’s Mean Return is 1.24 points higher than that of MTUM and its R-squared is 85.73 points higher. With a Standard Deviation of 18.04, VXF is slightly more volatile than MTUM. The Alpha and Beta of VXF are 3.26 points lower and 1.23 points higher than MTUM’s Alpha and Beta.
Performance
Annual Returns
| Year | VXF | MTUM |
| 2020 | 32.19% | 29.69% |
| 2019 | 28.04% | 27.57% |
| 2018 | -9.37% | -1.77% |
| 2017 | 18.1% | 37.6% |
| 2016 | 16.16% | 4.89% |
| 2015 | -3.26% | 9.12% |
| 2014 | 7.55% | 14.48% |
| 2013 | 38.37% | 0.0% |
| 2012 | 18.48% | 0.0% |
| 2011 | -3.61% | 0.0% |
| 2010 | 27.55% | 0.0% |
VXF had its best year in 2013 with an annual return of 38.37%. VXF’s worst year over the past decade yielded -9.37% and occurred in 2018. In most years the Vanguard Extended Market Index Fund ETF Shares provided moderate returns such as in 2016, 2017, and 2012 where annual returns amounted to 16.16%, 18.1%, and 18.48% 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 |
| VXF | $10,000 | $21,894 | 15.47% |
| MTUM | $10,000 | $29,301 | 17.37% |
A $10,000 investment in VXF would have resulted in a final balance of $21,894. This is a profit of $11,894 over 7 years and amounts to a compound annual growth rate (CAGR) of 15.47%.
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%.
VXF’s CAGR is 1.90 percentage points lower than that of MTUM and as a result, would have yielded $7,407 less on a $10,000 investment. Thus, VXF performed worse than MTUM by 1.90% annually.
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