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BND vs. IJH: What’s The Difference?

The Vanguard Total Bond Market Index Fund ETF Shares (BND) and the iShares Core S&P Mid-Cap ETF (IJH) are both among the Top 100 ETFs. BND is a Vanguard Intermediate-Term Bond fund and IJH is a iShares Mid-Cap Blend fund. So, what’s the difference between BND and IJH? And which fund is better?

The expense ratio of BND is 0.02 percentage points lower than IJH’s (0.03% vs. 0.05%). BND is mostly comprised of AAA bonds while IJH has a high exposure to the industrials sector. Overall, BND has provided lower returns than IJH over the past ten years.

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

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Summary

BNDIJH
NameVanguard Total Bond Market Index Fund ETF SharesiShares Core S&P Mid-Cap ETF
CategoryIntermediate-Term BondMid-Cap Blend
IssuerVanguardiShares
AUM312.15B63.4B
Avg. Return4.09%13.50%
Div. Yield2.02%1.07%
Expense Ratio0.03%0.05%

The Vanguard Total Bond Market Index Fund ETF Shares (BND) is a Intermediate-Term Bond fund that is issued by Vanguard. It currently has 312.15B total assets under management and has yielded an average annual return of 4.09% over the past 10 years. The fund has a dividend yield of 2.02% with an expense ratio of 0.03%.

The iShares Core S&P Mid-Cap ETF (IJH) is a Mid-Cap Blend fund that is issued by iShares. It currently has 63.4B total assets under management and has yielded an average annual return of 13.50% over the past 10 years. The fund has a dividend yield of 1.07% with an expense ratio of 0.05%.

BND’s dividend yield is 0.95% higher than that of IJH (2.02% vs. 1.07%). Also, BND yielded on average 9.40% less per year over the past decade (4.09% vs. 13.50%). The expense ratio of BND is 0.02 percentage points lower than IJH’s (0.03% vs. 0.05%).

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Fund Composition

Holdings

BND - Holdings

BND Bond SectorsWeight
AAA68.72%
BBB16.17%
A11.87%
AA3.34%
Below B0.01%
B0.0%
BB0.0%
US Government0.0%
Others-0.11%

BND’s Top Bond Sectors are ratings of AAA, BBB, A, AA, and Below B at 68.72%, 16.17%, 11.87%, 3.34%, and 0.01%. The fund is less weighted towards B (0.0%), BB (0.0%), and US Government (0.0%) rated bonds.

IJH - Holdings

IJH HoldingsWeight
Bio-Techne Corp0.8%
Molina Healthcare Inc0.68%
Cognex Corp0.68%
Fair Isaac Corp0.64%
Camden Property Trust0.62%
XPO Logistics Inc0.6%
Masimo Corp0.59%
SolarEdge Technologies Inc0.57%
FactSet Research Systems Inc0.57%
Graco Inc0.56%

IJH’s Top Holdings are Bio-Techne Corp, Molina Healthcare Inc, Cognex Corp, Fair Isaac Corp, and Camden Property Trust at 0.8%, 0.68%, 0.68%, 0.64%, and 0.62%.

XPO Logistics Inc (0.6%), Masimo Corp (0.59%), and SolarEdge Technologies Inc (0.57%) have a slightly smaller but still significant weight. FactSet Research Systems Inc and Graco Inc are also represented in the IJH’s holdings at 0.57% and 0.56%.

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Risk Analysis

BNDIJH
Mean Return0.281.13
R-squared99.3486.39
Std. Deviation3.1416.8
Alpha-0.14-4.01
Beta1.041.15
Sharpe Ratio0.880.77
Treynor Ratio2.6410.55

The Vanguard Total Bond Market Index Fund ETF Shares (BND) has a Mean Return of 0.28 with a Treynor Ratio of 2.64 and a R-squared of 99.34. Its Sharpe Ratio is 0.88 while BND’s Alpha is -0.14. Furthermore, the fund has a Beta of 1.04 and a Standard Deviation of 3.14.

The iShares Core S&P Mid-Cap ETF (IJH) has a Beta of 1.15 with a Alpha of -4.01 and a Mean Return of 1.13. Its Standard Deviation is 16.8 while IJH’s Treynor Ratio is 10.55. Furthermore, the fund has a Sharpe Ratio of 0.77 and a R-squared of 86.39.

BND’s Mean Return is 0.85 points lower than that of IJH and its R-squared is 12.95 points higher. With a Standard Deviation of 3.14, BND is slightly less volatile than IJH. The Alpha and Beta of BND are 3.87 points higher and 0.11 points lower than IJH’s Alpha and Beta.

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Performance

Annual Returns

BND vs. IJH - Annual Returns

YearBNDIJH
20207.71%13.61%
20198.71%26.14%
2018-0.04%-11.14%
20173.62%16.19%
20162.57%20.63%
20150.39%-2.23%
20145.96%9.64%
2013-2.14%33.4%
20124.04%17.76%
20117.71%-1.89%
20106.51%26.38%

BND had its best year in 2019 with an annual return of 8.71%. BND’s worst year over the past decade yielded -2.14% and occurred in 2013. In most years the Vanguard Total Bond Market Index Fund ETF Shares provided moderate returns such as in 2017, 2012, and 2014 where annual returns amounted to 3.62%, 4.04%, and 5.96% respectively.

The year 2013 was the strongest year for IJH, returning 33.4% on an annual basis. The poorest year for IJH in the last ten years was 2018, with a yield of -11.14%. Most years the iShares Core S&P Mid-Cap ETF has given investors modest returns, such as in 2020, 2017, and 2012, when gains were 13.61%, 16.19%, and 17.76% respectively.

Portfolio Growth

BND vs. IJH - Portfolio Growth

FundInitial BalanceFinal BalanceCAGR
BND$10,000$15,4564.09%
IJH$10,000$37,26613.50%

A $10,000 investment in BND would have resulted in a final balance of $15,456. This is a profit of $5,456 over 11 years and amounts to a compound annual growth rate (CAGR) of 4.09%.

With a $10,000 investment in IJH, the end total would have been $37,266. This equates to a $27,266 profit over 11 years and a compound annual growth rate (CAGR) of 13.50%.

BND’s CAGR is 9.40 percentage points lower than that of IJH and as a result, would have yielded $21,810 less on a $10,000 investment. Thus, BND performed worse than IJH by 9.40% annually.


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