The iShares Core S&P Mid-Cap ETF (IJH) and the iShares Core Dividend Growth ETF (DGRO) are both among the Top 100 ETFs. IJH is a iShares Mid-Cap Blend fund and DGRO is a iShares Large Value fund. So, what’s the difference between IJH and DGRO? And which fund is better?
The expense ratio of IJH is 0.03 percentage points lower than DGRO’s (0.05% vs. 0.08%). IJH also has a higher exposure to the industrials sector and a higher standard deviation. Overall, IJH has provided higher returns than DGRO over the past ten years.
In this article, we’ll compare IJH vs. DGRO. We’ll look at fund composition and portfolio growth, as well as at their holdings and industry exposure. Moreover, I’ll also discuss IJH’s and DGRO’s risk metrics, performance, and annual returns and examine how these affect their overall returns.
Summary
| IJH | DGRO | |
| Name | iShares Core S&P Mid-Cap ETF | iShares Core Dividend Growth ETF |
| Category | Mid-Cap Blend | Large Value |
| Issuer | iShares | iShares |
| AUM | 63.4B | 20B |
| Avg. Return | 13.50% | 12.46% |
| Div. Yield | 1.07% | 2.04% |
| Expense Ratio | 0.05% | 0.08% |
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 iShares Core Dividend Growth ETF (DGRO) is a Large Value fund that is issued by iShares. It currently has 20B total assets under management and has yielded an average annual return of 12.46% over the past 10 years. The fund has a dividend yield of 2.04% with an expense ratio of 0.08%.
IJH’s dividend yield is 0.97% lower than that of DGRO (1.07% vs. 2.04%). Also, IJH yielded on average 1.04% more per year over the past decade (13.50% vs. 12.46%). The expense ratio of IJH is 0.03 percentage points lower than DGRO’s (0.05% vs. 0.08%).
Fund Composition
Industry Exposure
| IJH | DGRO | |
| Technology | 14.81% | 18.98% |
| Industrials | 18.09% | 12.52% |
| Energy | 2.5% | 0.11% |
| Communication Services | 1.57% | 4.53% |
| Utilities | 2.9% | 7.34% |
| Healthcare | 10.89% | 17.55% |
| Consumer Defensive | 4.02% | 10.24% |
| Real Estate | 10.04% | 0.0% |
| Financial Services | 14.85% | 18.47% |
| Consumer Cyclical | 14.91% | 7.42% |
| Basic Materials | 5.42% | 2.83% |
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 iShares Core Dividend Growth ETF (DGRO) has the most exposure to the Technology sector at 18.98%. This is followed by Financial Services and Healthcare at 18.47% and 17.55% respectively. Energy (0.11%), Basic Materials (2.83%), and Communication Services (4.53%) only make up 7.47% of the fund’s total assets.
DGRO’s mid-section with moderate exposure is comprised of Utilities, Consumer Cyclical, Consumer Defensive, Industrials, and Healthcare stocks at 7.34%, 7.42%, 10.24%, 12.52%, and 17.55%.
IJH is 5.57% more exposed to the Industrials sector than DGRO (18.09% vs 12.52%). IJH’s exposure to Consumer Cyclical and Financial Services stocks is 7.49% higher and 3.62% lower respectively (14.91% vs. 7.42% and 14.85% vs. 18.47%). In total, Energy, Utilities, and Consumer Defensive also make up 8.27% less of the fund’s holdings compared to DGRO (9.42% vs. 17.69%).
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%.
| DGRO Holdings | Weight |
| Microsoft Corp | 3.29% |
| Apple Inc | 3.26% |
| Pfizer Inc | 2.89% |
| Johnson & Johnson | 2.87% |
| Procter & Gamble Co | 2.79% |
| Verizon Communications Inc | 2.68% |
| JPMorgan Chase & Co | 2.57% |
| The Home Depot Inc | 2.35% |
| Merck & Co Inc | 2.11% |
| Cisco Systems Inc | 1.98% |
DGRO’s Top Holdings are Microsoft Corp, Apple Inc, Pfizer Inc, Johnson & Johnson, and Procter & Gamble Co at 3.29%, 3.26%, 2.89%, 2.87%, and 2.79%.
Verizon Communications Inc (2.68%), JPMorgan Chase & Co (2.57%), and The Home Depot Inc (2.35%) have a slightly smaller but still significant weight. Merck & Co Inc and Cisco Systems Inc are also represented in the DGRO’s holdings at 2.11% and 1.98%.
Risk Analysis
| IJH | DGRO | |
| 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 Treynor Ratio of 10.55. Its Mean Return is 1.13 while IJH’s Sharpe Ratio is 0.77. Furthermore, the fund has a Beta of 1.15 and a Alpha of -4.01.
The iShares Core Dividend Growth ETF (DGRO) has a Sharpe Ratio of 0 with a Mean Return of 0 and a Treynor Ratio of 0. Its Beta is 0 while DGRO’s Standard Deviation 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 DGRO and its R-squared is 86.39 points higher. With a Standard Deviation of 16.8, IJH is slightly more volatile than DGRO. The Alpha and Beta of IJH are 4.01 points lower and 1.15 points higher than DGRO’s Alpha and Beta.
Performance
Annual Returns
| Year | IJH | DGRO |
| 2020 | 13.61% | 9.47% |
| 2019 | 26.14% | 30.02% |
| 2018 | -11.14% | -2.24% |
| 2017 | 16.19% | 22.84% |
| 2016 | 20.63% | 15.27% |
| 2015 | -2.23% | -0.62% |
| 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 2019 was the strongest year for DGRO, returning 30.02% on an annual basis. The poorest year for DGRO in the last ten years was 2018, with a yield of -2.24%. Most years the iShares Core Dividend Growth ETF has given investors modest returns, such as in 2012, 2011, and 2010, when gains were 0.0%, 0.0%, and 0.0% respectively.
Portfolio Growth
| Fund | Initial Balance | Final Balance | CAGR |
| IJH | $10,000 | $17,450 | 13.50% |
| DGRO | $10,000 | $19,580 | 12.46% |
A $10,000 investment in IJH would have resulted in a final balance of $17,450. This is a profit of $7,450 over 6 years and amounts to a compound annual growth rate (CAGR) of 13.50%.
With a $10,000 investment in DGRO, the end total would have been $19,580. This equates to a $9,580 profit over 6 years and a compound annual growth rate (CAGR) of 12.46%.
IJH’s CAGR is 1.04 percentage points higher than that of DGRO and as a result, would have yielded $2,130 less on a $10,000 investment. Thus, IJH outperformed DGRO by 1.04% annually.
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