The iShares Core S&P Mid-Cap ETF (IJH) and the iShares MSCI Emerging Markets ETF (EEM) are both among the Top 100 ETFs. IJH is a iShares Mid-Cap Blend fund and EEM is a iShares Diversified Emerging Mkts fund. So, what’s the difference between IJH and EEM? And which fund is better?
The expense ratio of IJH is 0.63 percentage points lower than EEM’s (0.05% vs. 0.68%). IJH also has a higher exposure to the industrials sector and a lower standard deviation. Overall, IJH has provided higher returns than EEM over the past ten years.
In this article, we’ll compare IJH vs. EEM. We’ll look at annual returns and risk metrics, as well as at their performance and portfolio growth. Moreover, I’ll also discuss IJH’s and EEM’s fund composition, industry exposure, and holdings and examine how these affect their overall returns.
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|Name||iShares Core S&P Mid-Cap ETF||iShares MSCI Emerging Markets ETF|
|Category||Mid-Cap Blend||Diversified Emerging Mkts|
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 MSCI Emerging Markets ETF (EEM) is a Diversified Emerging Mkts fund that is issued by iShares. It currently has 30.33B total assets under management and has yielded an average annual return of 5.47% over the past 10 years. The fund has a dividend yield of 1.48% with an expense ratio of 0.68%.
IJH’s dividend yield is 0.41% lower than that of EEM (1.07% vs. 1.48%). Also, IJH yielded on average 8.03% more per year over the past decade (13.50% vs. 5.47%). The expense ratio of IJH is 0.63 percentage points lower than EEM’s (0.05% vs. 0.68%).
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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 MSCI Emerging Markets ETF (EEM) has the most exposure to the Technology sector at 21.36%. This is followed by Financial Services and Consumer Cyclical at 18.39% and 15.16% respectively. Utilities (1.99%), Industrials (4.61%), and Healthcare (5.06%) only make up 11.66% of the fund’s total assets.
EEM’s mid-section with moderate exposure is comprised of Energy, Consumer Defensive, Basic Materials, Communication Services, and Consumer Cyclical stocks at 5.17%, 5.45%, 9.07%, 11.76%, and 15.16%.
IJH is 13.48% more exposed to the Industrials sector than EEM (18.09% vs 4.61%). IJH’s exposure to Consumer Cyclical and Financial Services stocks is 0.25% lower and 3.54% lower respectively (14.91% vs. 15.16% and 14.85% vs. 18.39%). In total, Energy, Utilities, and Consumer Defensive also make up 3.19% less of the fund’s holdings compared to EEM (9.42% vs. 12.61%).
|Molina Healthcare Inc||0.68%|
|Fair Isaac Corp||0.64%|
|Camden Property Trust||0.62%|
|XPO Logistics Inc||0.6%|
|SolarEdge Technologies Inc||0.57%|
|FactSet Research Systems Inc||0.57%|
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%.
|Taiwan Semiconductor Manufacturing Co Ltd||6.36%|
|Alibaba Group Holding Ltd Ordinary Shares||4.58%|
|Tencent Holdings Ltd||4.41%|
|Samsung Electronics Co Ltd||4.05%|
|Naspers Ltd Class N||1.04%|
|Reliance Industries Ltd Shs Dematerialised||0.97%|
|China Construction Bank Corp Class H||0.83%|
EEM’s Top Holdings are Taiwan Semiconductor Manufacturing Co Ltd, Alibaba Group Holding Ltd Ordinary Shares, Tencent Holdings Ltd, Samsung Electronics Co Ltd, and Meituan at 6.36%, 4.58%, 4.41%, 4.05%, and 1.24%.
Vale SA (1.04%), Naspers Ltd Class N (1.04%), and Reliance Industries Ltd Shs Dematerialised (0.97%) have a slightly smaller but still significant weight. Infosys Ltd and China Construction Bank Corp Class H are also represented in the EEM’s holdings at 0.92% and 0.83%.
The iShares Core S&P Mid-Cap ETF (IJH) has a Standard Deviation of 16.8 with a Beta of 1.15 and a Treynor Ratio of 10.55. Its R-squared is 86.39 while IJH’s Mean Return is 1.13. Furthermore, the fund has a Sharpe Ratio of 0.77 and a Alpha of -4.01.
The iShares MSCI Emerging Markets ETF (EEM) has a Standard Deviation of 17.79 with a R-squared of 83.5 and a Alpha of -2.33. Its Beta is 1.08 while EEM’s Mean Return is 0.38. Furthermore, the fund has a Treynor Ratio of 2.22 and a Sharpe Ratio of 0.22.
IJH’s Mean Return is 0.75 points higher than that of EEM and its R-squared is 2.89 points higher. With a Standard Deviation of 16.8, IJH is slightly less volatile than EEM. The Alpha and Beta of IJH are 1.68 points lower and 0.07 points higher than EEM’s Alpha and Beta.
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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 2017 was the strongest year for EEM, returning 36.42% on an annual basis. The poorest year for EEM in the last ten years was 2011, with a yield of -18.87%. Most years the iShares MSCI Emerging Markets ETF has given investors modest returns, such as in 2014, 2016, and 2010, when gains were -2.82%, 10.51%, and 15.93% respectively.
|Fund||Initial Balance||Final Balance||CAGR|
A $10,000 investment in IJH would have resulted in a final balance of $37,266. This is a profit of $27,266 over 11 years and amounts to a compound annual growth rate (CAGR) of 13.50%.
With a $10,000 investment in EEM, the end total would have been $15,578. This equates to a $5,578 profit over 11 years and a compound annual growth rate (CAGR) of 5.47%.
IJH’s CAGR is 8.03 percentage points higher than that of EEM and as a result, would have yielded $21,688 more on a $10,000 investment. Thus, IJH outperformed EEM by 8.03% annually.
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