IJH vs. EMB: What’s The Difference?

The iShares Core S&P Mid-Cap ETF (IJH) and the iShares J.P. Morgan USD Emerging Markets Bond ETF (EMB) are both among the Top 100 ETFs. IJH is a iShares Mid-Cap Blend fund and EMB is a iShares Emerging Markets Bond fund. So, what’s the difference between IJH and EMB? And which fund is better?

The expense ratio of IJH is 0.34 percentage points lower than EMB’s (0.05% vs. 0.39%). IJH also has a high exposure to the industrials sector while EMB is mostly comprised of BBB bonds. Overall, IJH has provided higher returns than EMB over the past ten years.

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

Summary

IJH EMB
Name iShares Core S&P Mid-Cap ETF iShares J.P. Morgan USD Emerging Markets Bond ETF
Category Mid-Cap Blend Emerging Markets Bond
Issuer iShares iShares
AUM 63.4B 19.76B
Avg. Return 13.50% 6.43%
Div. Yield 1.07% 3.85%
Expense Ratio 0.05% 0.39%

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 J.P. Morgan USD Emerging Markets Bond ETF (EMB) is a Emerging Markets Bond fund that is issued by iShares. It currently has 19.76B total assets under management and has yielded an average annual return of 6.43% over the past 10 years. The fund has a dividend yield of 3.85% with an expense ratio of 0.39%.

IJH’s dividend yield is 2.78% lower than that of EMB (1.07% vs. 3.85%). Also, IJH yielded on average 7.06% more per year over the past decade (13.50% vs. 6.43%). The expense ratio of IJH is 0.34 percentage points lower than EMB’s (0.05% vs. 0.39%).

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Fund Composition

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%.

EMB - Holdings

EMB Bond Sectors Weight
BBB 33.79%
B 21.97%
BB 16.92%
A 13.67%
AA 7.97%
Below B 4.49%
Others 1.11%
AAA 0.09%
US Government 0.0%

EMB’s Top Bond Sectors are ratings of BBB, B, BB, A, and AA at 33.79%, 21.97%, 16.92%, 13.67%, and 7.97%. The fund is less weighted towards Below B (4.49%), Others (1.11%), and AAA (0.09%) rated bonds.

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Risk Analysis

IJH EMB
Mean Return 1.13 0.44
R-squared 86.39 23.34
Std. Deviation 16.8 8.44
Alpha -4.01 0.89
Beta 1.15 1.36
Sharpe Ratio 0.77 0.55
Treynor Ratio 10.55 3.24

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

The iShares J.P. Morgan USD Emerging Markets Bond ETF (EMB) has a Beta of 1.36 with a Treynor Ratio of 3.24 and a Mean Return of 0.44. Its Standard Deviation is 8.44 while EMB’s R-squared is 23.34. Furthermore, the fund has a Alpha of 0.89 and a Sharpe Ratio of 0.55.

IJH’s Mean Return is 0.69 points higher than that of EMB and its R-squared is 63.05 points higher. With a Standard Deviation of 16.8, IJH is slightly more volatile than EMB. The Alpha and Beta of IJH are 4.90 points lower and 0.21 points lower than EMB’s Alpha and Beta.

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Performance

Annual Returns

IJH vs. EMB - Annual Returns

Year IJH EMB
2020 13.61% 5.48%
2019 26.14% 15.57%
2018 -11.14% -5.67%
2017 16.19% 9.98%
2016 20.63% 9.41%
2015 -2.23% 0.43%
2014 9.64% 6.69%
2013 33.4% -7.42%
2012 17.76% 17.64%
2011 -1.89% 7.2%
2010 26.38% 11.47%

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 2012 was the strongest year for EMB, returning 17.64% on an annual basis. The poorest year for EMB in the last ten years was 2013, with a yield of -7.42%. Most years the iShares J.P. Morgan USD Emerging Markets Bond ETF has given investors modest returns, such as in 2014, 2011, and 2016, when gains were 6.69%, 7.2%, and 9.41% respectively.

Portfolio Growth

IJH vs. EMB - Portfolio Growth

Fund Initial Balance Final Balance CAGR
IJH $10,000 $37,266 13.50%
EMB $10,000 $19,295 6.43%

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 EMB, the end total would have been $19,295. This equates to a $9,295 profit over 11 years and a compound annual growth rate (CAGR) of 6.43%.

IJH’s CAGR is 7.06 percentage points higher than that of EMB and as a result, would have yielded $17,971 more on a $10,000 investment. Thus, IJH outperformed EMB by 7.06% annually.


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