IJH vs. HYG: What’s The Difference?

The iShares Core S&P Mid-Cap ETF (IJH) and the iShares iBoxx $ High Yield Corporate Bond ETF (HYG) are both among the Top 100 ETFs. IJH is a iShares Mid-Cap Blend fund and HYG is a iShares High Yield Bond fund. So, what’s the difference between IJH and HYG? And which fund is better?

The expense ratio of IJH is 0.43 percentage points lower than HYG’s (0.05% vs. 0.48%). IJH also has a high exposure to the industrials sector while HYG is mostly comprised of BB bonds. Overall, IJH has provided higher returns than HYG over the past ten years.

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

Summary

IJH HYG
Name iShares Core S&P Mid-Cap ETF iShares iBoxx $ High Yield Corporate Bond ETF
Category Mid-Cap Blend High Yield Bond
Issuer iShares iShares
AUM 63.4B 20.03B
Avg. Return 13.50% 6.42%
Div. Yield 1.07% 4.44%
Expense Ratio 0.05% 0.48%

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 iBoxx $ High Yield Corporate Bond ETF (HYG) is a High Yield Bond fund that is issued by iShares. It currently has 20.03B total assets under management and has yielded an average annual return of 6.42% over the past 10 years. The fund has a dividend yield of 4.44% with an expense ratio of 0.48%.

IJH’s dividend yield is 3.37% lower than that of HYG (1.07% vs. 4.44%). Also, IJH yielded on average 7.08% more per year over the past decade (13.50% vs. 6.42%). The expense ratio of IJH is 0.43 percentage points lower than HYG’s (0.05% vs. 0.48%).

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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%.

HYG - Holdings

HYG Bond Sectors Weight
BB 56.53%
B 31.27%
Below B 11.4%
BBB 0.61%
AAA 0.28%
A 0.0%
AA 0.0%
US Government 0.0%
Others -0.09%

HYG’s Top Bond Sectors are ratings of BB, B, Below B, BBB, and AAA at 56.53%, 31.27%, 11.4%, 0.61%, and 0.28%. The fund is less weighted towards A (0.0%), AA (0.0%), and US Government (0.0%) rated bonds.

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Risk Analysis

IJH HYG
Mean Return 1.13 0.46
R-squared 86.39 4.1
Std. Deviation 16.8 6.96
Alpha -4.01 3.58
Beta 1.15 0.48
Sharpe Ratio 0.77 0.7
Treynor Ratio 10.55 10.01

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

The iShares iBoxx $ High Yield Corporate Bond ETF (HYG) has a Beta of 0.48 with a Standard Deviation of 6.96 and a R-squared of 4.1. Its Alpha is 3.58 while HYG’s Sharpe Ratio is 0.7. Furthermore, the fund has a Treynor Ratio of 10.01 and a Mean Return of 0.46.

IJH’s Mean Return is 0.67 points higher than that of HYG and its R-squared is 82.29 points higher. With a Standard Deviation of 16.8, IJH is slightly more volatile than HYG. The Alpha and Beta of IJH are 7.59 points lower and 0.67 points higher than HYG’s Alpha and Beta.

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Performance

Annual Returns

IJH vs. HYG - Annual Returns

Year IJH HYG
2020 13.61% 4.12%
2019 26.14% 14.23%
2018 -11.14% -1.93%
2017 16.19% 6.09%
2016 20.63% 13.92%
2015 -2.23% -5.55%
2014 9.64% 2.0%
2013 33.4% 5.9%
2012 17.76% 13.83%
2011 -1.89% 5.89%
2010 26.38% 12.07%

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 HYG, returning 14.23% on an annual basis. The poorest year for HYG in the last ten years was 2015, with a yield of -5.55%. Most years the iShares iBoxx $ High Yield Corporate Bond ETF has given investors modest returns, such as in 2011, 2013, and 2017, when gains were 5.89%, 5.9%, and 6.09% respectively.

Portfolio Growth

IJH vs. HYG - Portfolio Growth

Fund Initial Balance Final Balance CAGR
IJH $10,000 $37,266 13.50%
HYG $10,000 $19,427 6.42%

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 HYG, the end total would have been $19,427. This equates to a $9,427 profit over 11 years and a compound annual growth rate (CAGR) of 6.42%.

IJH’s CAGR is 7.08 percentage points higher than that of HYG and as a result, would have yielded $17,839 more on a $10,000 investment. Thus, IJH outperformed HYG by 7.08% annually.


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