The iShares Core S&P Mid-Cap ETF (IJH) and the iShares 1-5 Year Investment Grade Corporate Bond ETF (IGSB) are both among the Top 100 ETFs. IJH is a iShares Mid-Cap Blend fund and IGSB is a iShares Short-Term Bond fund. So, what’s the difference between IJH and IGSB? And which fund is better?
The expense ratio of IJH is 0.01 percentage points lower than IGSB’s (0.05% vs. 0.06%). IJH also has a high exposure to the industrials sector while IGSB is mostly comprised of BBB bonds. Overall, IJH has provided higher returns than IGSB over the past ten years.
In this article, we’ll compare IJH vs. IGSB. We’ll look at risk metrics and holdings, as well as at their portfolio growth and industry exposure. Moreover, I’ll also discuss IJH’s and IGSB’s performance, annual returns, and fund composition and examine how these affect their overall returns.
|Name||iShares Core S&P Mid-Cap ETF||iShares 1-5 Year Investment Grade Corporate Bond ETF|
|Category||Mid-Cap Blend||Short-Term Bond|
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 1-5 Year Investment Grade Corporate Bond ETF (IGSB) is a Short-Term Bond fund that is issued by iShares. It currently has 26.63B total assets under management and has yielded an average annual return of 2.51% over the past 10 years. The fund has a dividend yield of 2.02% with an expense ratio of 0.06%.
IJH’s dividend yield is 0.95% lower than that of IGSB (1.07% vs. 2.02%). Also, IJH yielded on average 10.99% more per year over the past decade (13.50% vs. 2.51%). The expense ratio of IJH is 0.01 percentage points lower than IGSB’s (0.05% vs. 0.06%).
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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%.
|IGSB Bond Sectors||Weight|
IGSB’s Top Bond Sectors are ratings of BBB, A, AA, AAA, and BB at 50.48%, 40.04%, 7.46%, 2.21%, and 0.09%. The fund is less weighted towards Below B (0.0%), B (0.0%), and US Government (0.0%) rated bonds.
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The iShares Core S&P Mid-Cap ETF (IJH) has a R-squared of 86.39 with a Alpha of -4.01 and a Mean Return of 1.13. Its Treynor Ratio is 10.55 while IJH’s Beta is 1.15. Furthermore, the fund has a Sharpe Ratio of 0.77 and a Standard Deviation of 16.8.
The iShares 1-5 Year Investment Grade Corporate Bond ETF (IGSB) has a Beta of 0.34 with a Treynor Ratio of 4.82 and a Mean Return of 0.19. Its Sharpe Ratio is 0.82 while IGSB’s Alpha is 0.69. Furthermore, the fund has a Standard Deviation of 2 and a R-squared of 26.13.
IJH’s Mean Return is 0.94 points higher than that of IGSB and its R-squared is 60.26 points higher. With a Standard Deviation of 16.8, IJH is slightly more volatile than IGSB. The Alpha and Beta of IJH are 4.70 points lower and 0.81 points higher than IGSB’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 2019 was the strongest year for IGSB, returning 7.01% on an annual basis. The poorest year for IGSB in the last ten years was 2015, with a yield of 0.7%. Most years the iShares 1-5 Year Investment Grade Corporate Bond ETF has given investors modest returns, such as in 2011, 2017, and 2016, when gains were 1.34%, 1.41%, and 1.77% 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 IGSB, the end total would have been $13,103. This equates to a $3,103 profit over 11 years and a compound annual growth rate (CAGR) of 2.51%.
IJH’s CAGR is 10.99 percentage points higher than that of IGSB and as a result, would have yielded $24,163 more on a $10,000 investment. Thus, IJH outperformed IGSB by 10.99% annually.
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