The iShares Core S&P Mid-Cap ETF (IJH) and the iShares 7-10 Year Treasury Bond ETF (IEF) are both among the Top 100 ETFs. IJH is a iShares Mid-Cap Blend fund and IEF is a iShares Long Government fund. So, what’s the difference between IJH and IEF? And which fund is better?
The expense ratio of IJH is 0.10 percentage points lower than IEF’s (0.05% vs. 0.15%). IJH also has a high exposure to the industrials sector while IEF is mostly comprised of AAA bonds. Overall, IJH has provided higher returns than IEF over the past ten years.
In this article, we’ll compare IJH vs. IEF. We’ll look at risk metrics and fund composition, as well as at their annual returns and portfolio growth. Moreover, I’ll also discuss IJH’s and IEF’s performance, holdings, and industry exposure and examine how these affect their overall returns.
|Name||iShares Core S&P Mid-Cap ETF||iShares 7-10 Year Treasury Bond ETF|
|Category||Mid-Cap Blend||Long Government|
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 7-10 Year Treasury Bond ETF (IEF) is a Long Government fund that is issued by iShares. It currently has 13.44B total assets under management and has yielded an average annual return of 5.06% over the past 10 years. The fund has a dividend yield of 0.84% with an expense ratio of 0.15%.
IJH’s dividend yield is 0.23% higher than that of IEF (1.07% vs. 0.84%). Also, IJH yielded on average 8.44% more per year over the past decade (13.50% vs. 5.06%). The expense ratio of IJH is 0.10 percentage points lower than IEF’s (0.05% vs. 0.15%).
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|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%.
|IEF Bond Sectors||Weight|
IEF’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.
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The iShares Core S&P Mid-Cap ETF (IJH) has a Alpha of -4.01 with a Beta of 1.15 and a Standard Deviation of 16.8. Its Sharpe Ratio is 0.77 while IJH’s Mean Return is 1.13. Furthermore, the fund has a Treynor Ratio of 10.55 and a R-squared of 86.39.
The iShares 7-10 Year Treasury Bond ETF (IEF) has a Alpha of -1.2 with a Sharpe Ratio of 0.6 and a Standard Deviation of 5.42. Its Mean Return is 0.32 while IEF’s Beta is 1.59. Furthermore, the fund has a R-squared of 77.56 and a Treynor Ratio of 1.97.
IJH’s Mean Return is 0.81 points higher than that of IEF and its R-squared is 8.83 points higher. With a Standard Deviation of 16.8, IJH is slightly more volatile than IEF. The Alpha and Beta of IJH are 2.81 points lower and 0.44 points lower than IEF’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 2011 was the strongest year for IEF, returning 15.46% on an annual basis. The poorest year for IEF in the last ten years was 2013, with a yield of -6.12%. Most years the iShares 7-10 Year Treasury Bond ETF has given investors modest returns, such as in 2017, 2012, and 2019, when gains were 2.47%, 4.06%, and 8.38% 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 IEF, the end total would have been $16,936. This equates to a $6,936 profit over 11 years and a compound annual growth rate (CAGR) of 5.06%.
IJH’s CAGR is 8.44 percentage points higher than that of IEF and as a result, would have yielded $20,330 more on a $10,000 investment. Thus, IJH outperformed IEF by 8.44% annually.
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