IJH vs. ARKK: What’s The Difference?

The iShares Core S&P Mid-Cap ETF (IJH) and the ARK Innovation ETF (ARKK) are both among the Top 100 ETFs. IJH is a iShares Mid-Cap Blend fund and ARKK is a ARK ETF Trust Mid-Cap Growth fund. So, what’s the difference between IJH and ARKK? And which fund is better?

The expense ratio of IJH is 0.70 percentage points lower than ARKK’s (0.05% vs. 0.75%). IJH also has a higher exposure to the industrials sector and a higher standard deviation. Overall, IJH has provided lower returns than ARKK over the past ten years.

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

Summary

IJH ARKK
Name iShares Core S&P Mid-Cap ETF ARK Innovation ETF
Category Mid-Cap Blend Mid-Cap Growth
Issuer iShares ARK ETF Trust
AUM 63.4B 25.52B
Avg. Return 13.50% 55.45%
Div. Yield 1.07% 0.0%
Expense Ratio 0.05% 0.75%

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%.

The ARK Innovation ETF (ARKK) is a Mid-Cap Growth fund that is issued by ARK ETF Trust. It currently has 25.52B total assets under management and has yielded an average annual return of 55.45% over the past 10 years. The fund has a dividend yield of 0.0% with an expense ratio of 0.75%.

IJH’s dividend yield is 1.07% higher than that of ARKK (1.07% vs. 0.0%). Also, IJH yielded on average 41.95% less per year over the past decade (13.50% vs. 55.45%). The expense ratio of IJH is 0.70 percentage points lower than ARKK’s (0.05% vs. 0.75%).

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Fund Composition

Industry Exposure

IJH vs. ARKK - Industry Exposure

IJH ARKK
Technology 14.81% 30.5%
Industrials 18.09% 2.11%
Energy 2.5% 0.0%
Communication Services 1.57% 25.01%
Utilities 2.9% 0.0%
Healthcare 10.89% 29.47%
Consumer Defensive 4.02% 0.93%
Real Estate 10.04% 0.51%
Financial Services 14.85% 0.04%
Consumer Cyclical 14.91% 11.42%
Basic Materials 5.42% 0.0%

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%.

The ARK Innovation ETF (ARKK) has the most exposure to the Technology sector at 30.5%. This is followed by Healthcare and Communication Services at 29.47% and 25.01% respectively. Utilities (0.0%), Energy (0.0%), and Financial Services (0.04%) only make up 0.04% of the fund’s total assets.

ARKK’s mid-section with moderate exposure is comprised of Real Estate, Consumer Defensive, Industrials, Consumer Cyclical, and Communication Services stocks at 0.51%, 0.93%, 2.11%, 11.42%, and 25.01%.

IJH is 15.98% more exposed to the Industrials sector than ARKK (18.09% vs 2.11%). IJH’s exposure to Consumer Cyclical and Financial Services stocks is 3.49% higher and 14.81% higher respectively (14.91% vs. 11.42% and 14.85% vs. 0.04%). In total, Energy, Utilities, and Consumer Defensive also make up 8.49% more of the fund’s holdings compared to ARKK (9.42% vs. 0.93%).

Holdings

IJH - Holdings

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%.

ARKK - Holdings

ARKK Holdings Weight
Tesla Inc 9.56%
Roku Inc Class A 6.48%
Teladoc Health Inc 5.76%
Square Inc A 4.37%
Zoom Video Communications Inc 4.36%
Shopify Inc A 4.27%
Spotify Technology SA 3.68%
Twilio Inc A 3.66%
Coinbase Global Inc Ordinary Shares – Class A 3.65%
Unity Software Inc Ordinary Shares 3.41%

ARKK’s Top Holdings are Tesla Inc, Roku Inc Class A, Teladoc Health Inc, Square Inc A, and Zoom Video Communications Inc at 9.56%, 6.48%, 5.76%, 4.37%, and 4.36%.

Shopify Inc A (4.27%), Spotify Technology SA (3.68%), and Twilio Inc A (3.66%) have a slightly smaller but still significant weight. Coinbase Global Inc Ordinary Shares – Class A and Unity Software Inc Ordinary Shares are also represented in the ARKK’s holdings at 3.65% and 3.41%.

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Risk Analysis

IJH ARKK
Mean Return 1.13 0
R-squared 86.39 0
Std. Deviation 16.8 0
Alpha -4.01 0
Beta 1.15 0
Sharpe Ratio 0.77 0
Treynor Ratio 10.55 0

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

The ARK Innovation ETF (ARKK) has a Mean Return of 0 with a Treynor Ratio of 0 and a Beta of 0. Its Standard Deviation is 0 while ARKK’s Sharpe Ratio is 0. Furthermore, the fund has a R-squared of 0 and a Alpha of 0.

IJH’s Mean Return is 1.13 points higher than that of ARKK and its R-squared is 86.39 points higher. With a Standard Deviation of 16.8, IJH is slightly more volatile than ARKK. The Alpha and Beta of IJH are 4.01 points lower and 1.15 points higher than ARKK’s Alpha and Beta.

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Performance

Annual Returns

IJH vs. ARKK - Annual Returns

Year IJH ARKK
2020 13.61% 152.52%
2019 26.14% 35.73%
2018 -11.14% 3.58%
2017 16.19% 87.38%
2016 20.63% -1.96%
2015 -2.23% 3.76%
2014 9.64% 0.0%
2013 33.4% 0.0%
2012 17.76% 0.0%
2011 -1.89% 0.0%
2010 26.38% 0.0%

IJH had its best year in 2013 with an annual return of 33.4%. IJH’s worst year over the past decade yielded -11.14% and occurred in 2018. In most years the iShares Core S&P Mid-Cap ETF provided moderate returns such as in 2020, 2017, and 2012 where annual returns amounted to 13.61%, 16.19%, and 17.76% respectively.

The year 2020 was the strongest year for ARKK, returning 152.52% on an annual basis. The poorest year for ARKK in the last ten years was 2016, with a yield of -1.96%. Most years the ARK Innovation ETF has given investors modest returns, such as in 2011, 2010, and 2018, when gains were 0.0%, 0.0%, and 3.58% respectively.

Portfolio Growth

IJH vs. ARKK - Portfolio Growth

Fund Initial Balance Final Balance CAGR
IJH $10,000 $17,848 13.50%
ARKK $10,000 $65,218 55.45%

A $10,000 investment in IJH would have resulted in a final balance of $17,848. This is a profit of $7,848 over 5 years and amounts to a compound annual growth rate (CAGR) of 13.50%.

With a $10,000 investment in ARKK, the end total would have been $65,218. This equates to a $55,218 profit over 5 years and a compound annual growth rate (CAGR) of 55.45%.

IJH’s CAGR is 41.95 percentage points lower than that of ARKK and as a result, would have yielded $47,370 less on a $10,000 investment. Thus, IJH performed worse than ARKK by 41.95% annually.


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