The iShares Core MSCI Emerging Markets ETF (IEMG) and the iShares Core S&P Mid-Cap ETF (IJH) are both among the Top 100 ETFs. IEMG is a iShares Diversified Emerging Mkts fund and IJH is a iShares Mid-Cap Blend fund. So, what’s the difference between IEMG and IJH? And which fund is better?
The expense ratio of IEMG is 0.06 percentage points higher than IJH’s (0.11% vs. 0.05%). IEMG also has a higher exposure to the technology sector and a lower standard deviation. Overall, IEMG has provided lower returns than IJH over the past ten years.
In this article, we’ll compare IEMG vs. IJH. We’ll look at industry exposure and fund composition, as well as at their portfolio growth and risk metrics. Moreover, I’ll also discuss IEMG’s and IJH’s annual returns, performance, and holdings and examine how these affect their overall returns.
Summary
| IEMG | IJH | |
| Name | iShares Core MSCI Emerging Markets ETF | iShares Core S&P Mid-Cap ETF |
| Category | Diversified Emerging Mkts | Mid-Cap Blend |
| Issuer | iShares | iShares |
| AUM | 83.68B | 63.4B |
| Avg. Return | 7.41% | 13.50% |
| Div. Yield | 1.78% | 1.07% |
| Expense Ratio | 0.11% | 0.05% |
The iShares Core MSCI Emerging Markets ETF (IEMG) is a Diversified Emerging Mkts fund that is issued by iShares. It currently has 83.68B total assets under management and has yielded an average annual return of 7.41% over the past 10 years. The fund has a dividend yield of 1.78% with an expense ratio of 0.11%.
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%.
IEMG’s dividend yield is 0.71% higher than that of IJH (1.78% vs. 1.07%). Also, IEMG yielded on average 6.09% less per year over the past decade (7.41% vs. 13.50%). The expense ratio of IEMG is 0.06 percentage points higher than IJH’s (0.11% vs. 0.05%).
Fund Composition
Industry Exposure
| IEMG | IJH | |
| Technology | 20.44% | 14.81% |
| Industrials | 5.92% | 18.09% |
| Energy | 4.71% | 2.5% |
| Communication Services | 11.41% | 1.57% |
| Utilities | 2.13% | 2.9% |
| Healthcare | 5.73% | 10.89% |
| Consumer Defensive | 5.68% | 4.02% |
| Real Estate | 2.75% | 10.04% |
| Financial Services | 16.9% | 14.85% |
| Consumer Cyclical | 15.67% | 14.91% |
| Basic Materials | 8.64% | 5.42% |
The iShares Core MSCI Emerging Markets ETF (IEMG) has the most exposure to the Technology sector at 20.44%. This is followed by Financial Services and Consumer Cyclical at 16.9% and 15.67% respectively. Real Estate (2.75%), Energy (4.71%), and Consumer Defensive (5.68%) only make up 13.14% of the fund’s total assets.
IEMG’s mid-section with moderate exposure is comprised of Healthcare, Industrials, Basic Materials, Communication Services, and Consumer Cyclical stocks at 5.73%, 5.92%, 8.64%, 11.41%, and 15.67%.
The iShares Core S&P Mid-Cap ETF (IJH) has the most exposure to the Industrials sector at 18.09%. This is followed by Consumer Cyclical and Financial Services at 14.91% and 14.85% respectively. Energy (2.5%), Utilities (2.9%), and Consumer Defensive (4.02%) only make up 9.42% of the fund’s total assets.
IJH’s mid-section with moderate exposure is comprised of Basic Materials, Real Estate, Healthcare, Technology, and Financial Services stocks at 5.42%, 10.04%, 10.89%, 14.81%, and 14.85%.
IEMG is 5.63% more exposed to the Technology sector than IJH (20.44% vs 14.81%). IEMG’s exposure to Financial Services and Consumer Cyclical stocks is 2.05% higher and 0.76% higher respectively (16.9% vs. 14.85% and 15.67% vs. 14.91%). In total, Real Estate, Energy, and Consumer Defensive also make up 3.42% less of the fund’s holdings compared to IJH (13.14% vs. 16.56%).
Holdings
| IEMG Holdings | Weight |
| Taiwan Semiconductor Manufacturing Co Ltd | 5.37% |
| Tencent Holdings Ltd | 4.42% |
| Alibaba Group Holding Ltd Ordinary Shares | 4.38% |
| Samsung Electronics Co Ltd | 3.49% |
| Meituan | 1.52% |
| Naspers Ltd Class N | 0.93% |
| Vale SA | 0.91% |
| Reliance Industries Ltd Shs Dematerialised | 0.83% |
| China Construction Bank Corp Class H | 0.77% |
| Infosys Ltd | 0.74% |
IEMG’s Top Holdings are Taiwan Semiconductor Manufacturing Co Ltd, Tencent Holdings Ltd, Alibaba Group Holding Ltd Ordinary Shares, Samsung Electronics Co Ltd, and Meituan at 5.37%, 4.42%, 4.38%, 3.49%, and 1.52%.
Naspers Ltd Class N (0.93%), Vale SA (0.91%), and Reliance Industries Ltd Shs Dematerialised (0.83%) have a slightly smaller but still significant weight. China Construction Bank Corp Class H and Infosys Ltd are also represented in the IEMG’s holdings at 0.77% and 0.74%.
| IJH Holdings | Weight |
| Bio-Techne Corp | 0.8% |
| Molina Healthcare Inc | 0.68% |
| Cognex Corp | 0.68% |
| Fair Isaac Corp | 0.64% |
| Camden Property Trust | 0.62% |
| XPO Logistics Inc | 0.6% |
| Masimo Corp | 0.59% |
| SolarEdge Technologies Inc | 0.57% |
| FactSet Research Systems Inc | 0.57% |
| Graco Inc | 0.56% |
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%.
Risk Analysis
| IEMG | IJH | |
| Mean Return | 0 | 1.13 |
| R-squared | 0 | 86.39 |
| Std. Deviation | 0 | 16.8 |
| Alpha | 0 | -4.01 |
| Beta | 0 | 1.15 |
| Sharpe Ratio | 0 | 0.77 |
| Treynor Ratio | 0 | 10.55 |
The iShares Core MSCI Emerging Markets ETF (IEMG) has a Standard Deviation of 0 with a R-squared of 0 and a Sharpe Ratio of 0. Its Mean Return is 0 while IEMG’s Beta is 0. Furthermore, the fund has a Treynor Ratio of 0 and a Alpha of 0.
The iShares Core S&P Mid-Cap ETF (IJH) has a Alpha of -4.01 with a Standard Deviation of 16.8 and a Beta of 1.15. Its R-squared is 86.39 while IJH’s Treynor Ratio is 10.55. Furthermore, the fund has a Sharpe Ratio of 0.77 and a Mean Return of 1.13.
IEMG’s Mean Return is 1.13 points lower than that of IJH and its R-squared is 86.39 points lower. With a Standard Deviation of 0, IEMG is slightly less volatile than IJH. The Alpha and Beta of IEMG are 4.01 points higher and 1.15 points lower than IJH’s Alpha and Beta.
Performance
Annual Returns
| Year | IEMG | IJH |
| 2020 | 18.18% | 13.61% |
| 2019 | 17.5% | 26.14% |
| 2018 | -14.69% | -11.14% |
| 2017 | 36.78% | 16.19% |
| 2016 | 9.98% | 20.63% |
| 2015 | -13.86% | -2.23% |
| 2014 | -2.04% | 9.64% |
| 2013 | -2.16% | 33.4% |
| 2012 | 0.0% | 17.76% |
| 2011 | 0.0% | -1.89% |
| 2010 | 0.0% | 26.38% |
IEMG had its best year in 2017 with an annual return of 36.78%. IEMG’s worst year over the past decade yielded -14.69% and occurred in 2018. In most years the iShares Core MSCI Emerging Markets ETF provided moderate returns such as in 2012, 2011, and 2010 where annual returns amounted to 0.0%, 0.0%, and 0.0% 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
| Fund | Initial Balance | Final Balance | CAGR |
| IEMG | $10,000 | $15,037 | 7.41% |
| IJH | $10,000 | $19,132 | 13.50% |
A $10,000 investment in IEMG would have resulted in a final balance of $15,037. This is a profit of $5,037 over 7 years and amounts to a compound annual growth rate (CAGR) of 7.41%.
With a $10,000 investment in IJH, the end total would have been $19,132. This equates to a $9,132 profit over 7 years and a compound annual growth rate (CAGR) of 13.50%.
IEMG’s CAGR is 6.09 percentage points lower than that of IJH and as a result, would have yielded $4,095 less on a $10,000 investment. Thus, IEMG performed worse than IJH by 6.09% annually.
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