The iShares Core S&P Mid-Cap ETF (IJH) and the iShares U.S. Treasury Bond ETF (GOVT) are both among the Top 100 ETFs. IJH is a iShares Mid-Cap Blend fund and GOVT is a iShares Intermediate Government fund. So, what’s the difference between IJH and GOVT? And which fund is better?
IJH and GOVT have the same expense ratio: 0.05%. IJH also has a high exposure to the industrials sector while GOVT is mostly comprised of AAA bonds. Overall, IJH has provided higher returns than GOVT over the past ten years.
In this article, we’ll compare IJH vs. GOVT. We’ll look at industry exposure and annual returns, as well as at their risk metrics and holdings. Moreover, I’ll also discuss IJH’s and GOVT’s performance, portfolio growth, and fund composition and examine how these affect their overall returns.
Summary
| IJH | GOVT | |
| Name | iShares Core S&P Mid-Cap ETF | iShares U.S. Treasury Bond ETF |
| Category | Mid-Cap Blend | Intermediate Government |
| Issuer | iShares | iShares |
| AUM | 63.4B | 17.07B |
| Avg. Return | 13.50% | 2.67% |
| Div. Yield | 1.07% | 1.0% |
| Expense Ratio | 0.05% | 0.05% |
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 U.S. Treasury Bond ETF (GOVT) is a Intermediate Government fund that is issued by iShares. It currently has 17.07B total assets under management and has yielded an average annual return of 2.67% over the past 10 years. The fund has a dividend yield of 1.0% with an expense ratio of 0.05%.
IJH’s dividend yield is 0.07% higher than that of GOVT (1.07% vs. 1.0%). Also, IJH yielded on average 10.83% more per year over the past decade (13.50% vs. 2.67%). IJH and GOVT have the same expense ratio: 0.05%.
Fund Composition
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%.
| GOVT Bond Sectors | Weight |
| AAA | 100.0% |
| Others | 0.0% |
| Below B | 0.0% |
| B | 0.0% |
| BB | 0.0% |
| BBB | 0.0% |
| A | 0.0% |
| AA | 0.0% |
| US Government | 0.0% |
GOVT’s Top Bond Sectors are ratings of AAA, Others, Below B, B, and BB at 100.0%, 0.0%, 0.0%, 0.0%, and 0.0%. The fund is less weighted towards BBB (0.0%), A (0.0%), and AA (0.0%) rated bonds.
Risk Analysis
| IJH | GOVT | |
| 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 Sharpe Ratio of 0.77 with a Beta of 1.15 and a Mean Return of 1.13. Its Alpha is -4.01 while IJH’s Treynor Ratio is 10.55. Furthermore, the fund has a R-squared of 86.39 and a Standard Deviation of 16.8.
The iShares U.S. Treasury Bond ETF (GOVT) has a Treynor Ratio of 0 with a R-squared of 0 and a Beta of 0. Its Alpha is 0 while GOVT’s Standard Deviation is 0. Furthermore, the fund has a Mean Return of 0 and a Sharpe Ratio of 0.
IJH’s Mean Return is 1.13 points higher than that of GOVT and its R-squared is 86.39 points higher. With a Standard Deviation of 16.8, IJH is slightly more volatile than GOVT. The Alpha and Beta of IJH are 4.01 points lower and 1.15 points higher than GOVT’s Alpha and Beta.
Performance
Annual Returns
| Year | IJH | GOVT |
| 2020 | 13.61% | 7.92% |
| 2019 | 26.14% | 6.71% |
| 2018 | -11.14% | 0.74% |
| 2017 | 16.19% | 2.19% |
| 2016 | 20.63% | 0.92% |
| 2015 | -2.23% | 0.76% |
| 2014 | 9.64% | 4.99% |
| 2013 | 33.4% | -2.84% |
| 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 GOVT, returning 7.92% on an annual basis. The poorest year for GOVT in the last ten years was 2013, with a yield of -2.84%. Most years the iShares U.S. Treasury Bond ETF has given investors modest returns, such as in 2018, 2015, and 2016, when gains were 0.74%, 0.76%, and 0.92% respectively.
Portfolio Growth
| Fund | Initial Balance | Final Balance | CAGR |
| IJH | $10,000 | $25,522 | 13.50% |
| GOVT | $10,000 | $12,297 | 2.67% |
A $10,000 investment in IJH would have resulted in a final balance of $25,522. This is a profit of $15,522 over 8 years and amounts to a compound annual growth rate (CAGR) of 13.50%.
With a $10,000 investment in GOVT, the end total would have been $12,297. This equates to a $2,297 profit over 8 years and a compound annual growth rate (CAGR) of 2.67%.
IJH’s CAGR is 10.83 percentage points higher than that of GOVT and as a result, would have yielded $13,225 more on a $10,000 investment. Thus, IJH outperformed GOVT by 10.83% annually.
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