The iShares Core S&P Mid-Cap ETF (IJH) and the iShares MSCI EAFE ETF (EFA) are both among the Top 100 ETFs. IJH is a iShares Mid-Cap Blend fund and EFA is a iShares Foreign Large Blend fund. So, what’s the difference between IJH and EFA? And which fund is better?
The expense ratio of IJH is 0.27 percentage points lower than EFA’s (0.05% vs. 0.32%). IJH also has a higher exposure to the industrials sector and a higher standard deviation. Overall, IJH has provided higher returns than EFA over the past ten years.
In this article, we’ll compare IJH vs. EFA. We’ll look at annual returns and fund composition, as well as at their portfolio growth and holdings. Moreover, I’ll also discuss IJH’s and EFA’s performance, industry exposure, and risk metrics and examine how these affect their overall returns.
|Name||iShares Core S&P Mid-Cap ETF||iShares MSCI EAFE ETF|
|Category||Mid-Cap Blend||Foreign Large Blend|
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 EAFE ETF (EFA) is a Foreign Large Blend fund that is issued by iShares. It currently has 56.77B total assets under management and has yielded an average annual return of 6.47% over the past 10 years. The fund has a dividend yield of 2.28% with an expense ratio of 0.32%.
IJH’s dividend yield is 1.21% lower than that of EFA (1.07% vs. 2.28%). Also, IJH yielded on average 7.03% more per year over the past decade (13.50% vs. 6.47%). The expense ratio of IJH is 0.27 percentage points lower than EFA’s (0.05% vs. 0.32%).
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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 EAFE ETF (EFA) has the most exposure to the Financial Services sector at 16.88%. This is followed by Industrials and Healthcare at 15.01% and 12.8% respectively. Utilities (3.35%), Energy (3.51%), and Communication Services (5.68%) only make up 12.54% of the fund’s total assets.
EFA’s mid-section with moderate exposure is comprised of Basic Materials, Technology, Consumer Defensive, Consumer Cyclical, and Healthcare stocks at 7.91%, 9.68%, 10.56%, 11.62%, and 12.8%.
IJH is 3.08% more exposed to the Industrials sector than EFA (18.09% vs 15.01%). IJH’s exposure to Consumer Cyclical and Financial Services stocks is 3.29% higher and 2.03% lower respectively (14.91% vs. 11.62% and 14.85% vs. 16.88%). In total, Energy, Utilities, and Consumer Defensive also make up 8.00% less of the fund’s holdings compared to EFA (9.42% vs. 17.42%).
|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%.
|ASML Holding NV||1.69%|
|Roche Holding AG||1.55%|
|LVMH Moet Hennessy Louis Vuitton SE||1.28%|
|Toyota Motor Corp||1.09%|
|AIA Group Ltd||0.88%|
EFA’s Top Holdings are Nestle SA, ASML Holding NV, Roche Holding AG, LVMH Moet Hennessy Louis Vuitton SE, and Novartis AG at 2.11%, 1.69%, 1.55%, 1.28%, and 1.19%.
Toyota Motor Corp (1.09%), AstraZeneca PLC (0.92%), and Unilever PLC (0.9%) have a slightly smaller but still significant weight. AIA Group Ltd and SAP SE are also represented in the EFA’s holdings at 0.88% and 0.86%.
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The iShares Core S&P Mid-Cap ETF (IJH) has a Beta of 1.15 with a Treynor Ratio of 10.55 and a Mean Return of 1.13. Its Alpha is -4.01 while IJH’s Sharpe Ratio is 0.77. Furthermore, the fund has a R-squared of 86.39 and a Standard Deviation of 16.8.
The iShares MSCI EAFE ETF (EFA) has a Alpha of 0.47 with a Mean Return of 0.57 and a Beta of 0.98. Its Standard Deviation is 15.01 while EFA’s R-squared is 96.78. Furthermore, the fund has a Sharpe Ratio of 0.41 and a Treynor Ratio of 5.33.
IJH’s Mean Return is 0.56 points higher than that of EFA and its R-squared is 10.39 points lower. With a Standard Deviation of 16.8, IJH is slightly more volatile than EFA. The Alpha and Beta of IJH are 4.48 points lower and 0.17 points higher than EFA’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 EFA, returning 24.94% on an annual basis. The poorest year for EFA in the last ten years was 2018, with a yield of -13.83%. Most years the iShares MSCI EAFE ETF has given investors modest returns, such as in 2016, 2010, and 2020, when gains were 0.96%, 7.52%, and 7.92% 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 EFA, the end total would have been $18,269. This equates to a $8,269 profit over 11 years and a compound annual growth rate (CAGR) of 6.47%.
IJH’s CAGR is 7.03 percentage points higher than that of EFA and as a result, would have yielded $18,997 more on a $10,000 investment. Thus, IJH outperformed EFA by 7.03% annually.
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