IJH vs. MBB: What’s The Difference?

The iShares Core S&P Mid-Cap ETF (IJH) and the iShares MBS ETF (MBB) are both among the Top 100 ETFs. IJH is a iShares Mid-Cap Blend fund and MBB is a iShares Intermediate Government fund. So, what’s the difference between IJH and MBB? And which fund is better?

The expense ratio of IJH is 0.01 percentage points lower than MBB’s (0.05% vs. 0.06%). IJH also has a high exposure to the industrials sector while MBB is mostly comprised of AAA bonds. Overall, IJH has provided higher returns than MBB over the past ten years.

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

Summary

IJH MBB
Name iShares Core S&P Mid-Cap ETF iShares MBS ETF
Category Mid-Cap Blend Intermediate Government
Issuer iShares iShares
AUM 63.4B 25.69B
Avg. Return 13.50% 3.08%
Div. Yield 1.07% 1.88%
Expense Ratio 0.05% 0.06%

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 MBS ETF (MBB) is a Intermediate Government fund that is issued by iShares. It currently has 25.69B total assets under management and has yielded an average annual return of 3.08% over the past 10 years. The fund has a dividend yield of 1.88% with an expense ratio of 0.06%.

IJH’s dividend yield is 0.81% lower than that of MBB (1.07% vs. 1.88%). Also, IJH yielded on average 10.42% more per year over the past decade (13.50% vs. 3.08%). The expense ratio of IJH is 0.01 percentage points lower than MBB’s (0.05% vs. 0.06%).

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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%.

MBB - Holdings

MBB Bond Sectors Weight
AAA 99.51%
Others 0.49%
Below B 0.0%
B 0.0%
BB 0.0%
BBB 0.0%
A 0.0%
AA 0.0%
US Government 0.0%

MBB’s Top Bond Sectors are ratings of AAA, Others, Below B, B, and BB at 99.51%, 0.49%, 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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Risk Analysis

IJH MBB
Mean Return 1.13 0.2
R-squared 86.39 74.38
Std. Deviation 16.8 2.12
Alpha -4.01 0.14
Beta 1.15 0.6
Sharpe Ratio 0.77 0.87
Treynor Ratio 10.55 3.02

The iShares Core S&P Mid-Cap ETF (IJH) has a R-squared of 86.39 with a Standard Deviation of 16.8 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 Beta of 1.15 and a Sharpe Ratio of 0.77.

The iShares MBS ETF (MBB) has a Beta of 0.6 with a R-squared of 74.38 and a Mean Return of 0.2. Its Alpha is 0.14 while MBB’s Sharpe Ratio is 0.87. Furthermore, the fund has a Standard Deviation of 2.12 and a Treynor Ratio of 3.02.

IJH’s Mean Return is 0.93 points higher than that of MBB and its R-squared is 12.01 points higher. With a Standard Deviation of 16.8, IJH is slightly more volatile than MBB. The Alpha and Beta of IJH are 4.15 points lower and 0.55 points higher than MBB’s Alpha and Beta.

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Performance

Annual Returns

IJH vs. MBB - Annual Returns

Year IJH MBB
2020 13.61% 4.03%
2019 26.14% 6.27%
2018 -11.14% 0.81%
2017 16.19% 2.37%
2016 20.63% 1.28%
2015 -2.23% 1.28%
2014 9.64% 6.16%
2013 33.4% -1.92%
2012 17.76% 2.23%
2011 -1.89% 5.88%
2010 26.38% 5.44%

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 MBB, returning 6.27% on an annual basis. The poorest year for MBB in the last ten years was 2013, with a yield of -1.92%. Most years the iShares MBS ETF has given investors modest returns, such as in 2012, 2017, and 2020, when gains were 2.23%, 2.37%, and 4.03% respectively.

Portfolio Growth

IJH vs. MBB - Portfolio Growth

Fund Initial Balance Final Balance CAGR
IJH $10,000 $37,266 13.50%
MBB $10,000 $13,906 3.08%

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 MBB, the end total would have been $13,906. This equates to a $3,906 profit over 11 years and a compound annual growth rate (CAGR) of 3.08%.

IJH’s CAGR is 10.42 percentage points higher than that of MBB and as a result, would have yielded $23,360 more on a $10,000 investment. Thus, IJH outperformed MBB by 10.42% annually.


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