The Vanguard Total International Stock Index Fund ETF Shares (VXUS) and the iShares MSCI USA Momentum Factor ETF (MTUM) are both among the Top 100 ETFs. VXUS is a Vanguard Foreign Large Blend fund and MTUM is a iShares Large Growth fund. So, what’s the difference between VXUS and MTUM? And which fund is better?
The expense ratio of VXUS is 0.07 percentage points lower than MTUM’s (0.08% vs. 0.15%). VXUS also has a lower exposure to the financial services sector and a higher standard deviation. Overall, VXUS has provided lower returns than MTUM over the past ten years.
In this article, we’ll compare VXUS vs. MTUM. We’ll look at holdings and fund composition, as well as at their portfolio growth and annual returns. Moreover, I’ll also discuss VXUS’s and MTUM’s performance, industry exposure, and risk metrics and examine how these affect their overall returns.
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!
|Name||Vanguard Total International Stock Index Fund ETF Shares||iShares MSCI USA Momentum Factor ETF|
|Category||Foreign Large Blend||Large Growth|
The Vanguard Total International Stock Index Fund ETF Shares (VXUS) is a Foreign Large Blend fund that is issued by Vanguard. It currently has 404.73B total assets under management and has yielded an average annual return of 8.41% over the past 10 years. The fund has a dividend yield of 2.44% 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%.
VXUS’s dividend yield is 2.00% higher than that of MTUM (2.44% vs. 0.44%). Also, VXUS yielded on average 8.96% less per year over the past decade (8.41% vs. 17.37%). The expense ratio of VXUS is 0.07 percentage points lower than MTUM’s (0.08% vs. 0.15%).
FYI: The best way I've found to invest is through M1 Finance. It's free and you even get an instant line of credit and 100$! Have a look here (link to M1 Finance).
The Vanguard Total International Stock Index Fund ETF Shares (VXUS) has the most exposure to the Financial Services sector at 17.64%. This is followed by Technology and Industrials at 13.07% and 12.94% respectively. Real Estate (3.79%), Energy (4.55%), and Communication Services (7.06%) only make up 15.40% of the fund’s total assets.
VXUS’s mid-section with moderate exposure is comprised of Consumer Defensive, Basic Materials, Healthcare, Consumer Cyclical, and Industrials stocks at 7.83%, 8.37%, 9.19%, 12.64%, and 12.94%.
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%.
VXUS is 16.68% less exposed to the Financial Services sector than MTUM (17.64% vs 34.32%). VXUS’s exposure to Technology and Industrials stocks is 2.17% lower and 0.47% higher respectively (13.07% vs. 15.24% and 12.94% vs. 12.47%). In total, Real Estate, Energy, and Communication Services also make up 0.02% more of the fund’s holdings compared to MTUM (15.40% vs. 15.38%).
|Taiwan Semiconductor Manufacturing Co Ltd||1.62%|
|Tencent Holdings Ltd||1.41%|
|Alibaba Group Holding Ltd Ordinary Shares||1.26%|
|Samsung Electronics Co Ltd||1.05%|
|ASML Holding NV||0.86%|
|Roche Holding AG||0.81%|
|Toyota Motor Corp||0.67%|
|LVMH Moet Hennessy Louis Vuitton SE||0.61%|
VXUS’s Top Holdings are Taiwan Semiconductor Manufacturing Co Ltd, Tencent Holdings Ltd, Alibaba Group Holding Ltd Ordinary Shares, Nestle SA, and Samsung Electronics Co Ltd at 1.62%, 1.41%, 1.26%, 1.1%, and 1.05%.
ASML Holding NV (0.86%), Roche Holding AG (0.81%), and Toyota Motor Corp (0.67%) have a slightly smaller but still significant weight. LVMH Moet Hennessy Louis Vuitton SE and Novartis AG are also represented in the VXUS’s holdings at 0.61% and 0.6%.
|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%.
The Vanguard Total International Stock Index Fund ETF Shares (VXUS) has a Standard Deviation of 15.12 with a Sharpe Ratio of 0.4 and a Mean Return of 0.56. Its R-squared is 98.39 while VXUS’s Beta is 0.99. Furthermore, the fund has a Alpha of 0.31 and a Treynor Ratio of 5.14.
The iShares MSCI USA Momentum Factor ETF (MTUM) has a Alpha of 0 with a Beta of 0 and a Sharpe Ratio of 0. Its Standard Deviation is 0 while MTUM’s Treynor Ratio is 0. Furthermore, the fund has a Mean Return of 0 and a R-squared of 0.
VXUS’s Mean Return is 0.56 points higher than that of MTUM and its R-squared is 98.39 points higher. With a Standard Deviation of 15.12, VXUS is slightly more volatile than MTUM. The Alpha and Beta of VXUS are 0.31 points higher and 0.99 points higher than MTUM’s Alpha and Beta.
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).
VXUS had its best year in 2017 with an annual return of 27.52%. VXUS’s worst year over the past decade yielded -14.42% and occurred in 2018. In most years the Vanguard Total International Stock Index Fund ETF Shares provided moderate returns such as in 2010, 2016, and 2020 where annual returns amounted to 0.0%, 4.72%, and 11.32% 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 VXUS would have resulted in a final balance of $14,187. This is a profit of $4,187 over 7 years and amounts to a compound annual growth rate (CAGR) of 8.41%.
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%.
VXUS’s CAGR is 8.96 percentage points lower than that of MTUM and as a result, would have yielded $15,114 less on a $10,000 investment. Thus, VXUS performed worse than MTUM by 8.96% annually.
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.