The iShares Core S&P Mid-Cap ETF (IJH) and the iShares Preferred and Income Securities ETF (PFF) are both among the Top 100 ETFs. IJH is a iShares Mid-Cap Blend fund and PFF is a iShares Preferred Stock fund. So, what’s the difference between IJH and PFF? And which fund is better?
The expense ratio of IJH is 0.41 percentage points lower than PFF’s (0.05% vs. 0.46%). IJH also has a higher exposure to the industrials sector and a higher standard deviation. Overall, IJH has provided higher returns than PFF over the past ten years.
In this article, we’ll compare IJH vs. PFF. We’ll look at industry exposure and holdings, as well as at their performance and annual returns. Moreover, I’ll also discuss IJH’s and PFF’s portfolio growth, risk metrics, and fund composition and examine how these affect their overall returns.
|Name||iShares Core S&P Mid-Cap ETF||iShares Preferred and Income Securities ETF|
|Category||Mid-Cap Blend||Preferred Stock|
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 Preferred and Income Securities ETF (PFF) is a Preferred Stock fund that is issued by iShares. It currently has 19.8B total assets under management and has yielded an average annual return of 6.90% over the past 10 years. The fund has a dividend yield of 4.47% with an expense ratio of 0.46%.
IJH’s dividend yield is 3.40% lower than that of PFF (1.07% vs. 4.47%). Also, IJH yielded on average 6.60% more per year over the past decade (13.50% vs. 6.90%). The expense ratio of IJH is 0.41 percentage points lower than PFF’s (0.05% vs. 0.46%).
The iShares Core S&P Mid-Cap ETF (IJH) has the most exposure to the Industrials sector at 18.09%. This is followed by Consumer Cyclical and Financial Services at 14.91% and 14.85% respectively. Energy (2.5%), Utilities (2.9%), and Consumer Defensive (4.02%) only make up 9.42% of the fund’s total assets.
IJH’s mid-section with moderate exposure is comprised of Basic Materials, Real Estate, Healthcare, Technology, and Financial Services stocks at 5.42%, 10.04%, 10.89%, 14.81%, and 14.85%.
The iShares Preferred and Income Securities ETF (PFF) has the most exposure to the Utilities sector at 81.81%. This is followed by Industrials and Basic Materials at 10.27% and 3.74% respectively. Financial Services (0.0%), Consumer Defensive (0.0%), and Communication Services (0.0%) only make up 0.00% of the fund’s total assets.
PFF’s mid-section with moderate exposure is comprised of Energy, Technology, Real Estate, Healthcare, and Basic Materials stocks at 0.0%, 0.0%, 0.65%, 3.54%, and 3.74%.
IJH is 7.82% more exposed to the Industrials sector than PFF (18.09% vs 10.27%). IJH’s exposure to Consumer Cyclical and Financial Services stocks is 14.91% higher and 14.85% higher respectively (14.91% vs. 0.0% and 14.85% vs. 0.0%). In total, Energy, Utilities, and Consumer Defensive also make up 72.39% less of the fund’s holdings compared to PFF (9.42% vs. 81.81%).
|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%.
|Broadcom Inc Broadcom Inc 8 % Mandatory Convertible Preferred Stock Ser A||2.54%|
|BlackRock Cash Funds Treasury SL Agency||2.3%|
|Wells Fargo & Co 7 1/2 % Non Cum Perp Conv Pfd Shs -A- Series -L-||1.79%|
|Bank of America Corp 7 1/4 % Non-Cum Perp Conv Pfd Shs Series -L-||1.49%|
|ArcelorMittal S.A. 5.5%||1.36%|
|Danaher Corp PRF CONVERT 15/04/2022 USD – Ser A||1.35%|
|Danaher Corp 5% PRF PERPETUAL USD 1000 – Ser B||1.14%|
|NextEra Energy Inc Unit||1.12%|
|Citigroup Capital XIII Floating Rate Trust Pfd Secs Registered 2010-30.10.4||1.08%|
|Avantor Inc Ser A||0.99%|
PFF’s Top Holdings are Broadcom Inc Broadcom Inc 8 % Mandatory Convertible Preferred Stock Ser A, BlackRock Cash Funds Treasury SL Agency, Wells Fargo & Co 7 1/2 % Non Cum Perp Conv Pfd Shs -A- Series -L-, Bank of America Corp 7 1/4 % Non-Cum Perp Conv Pfd Shs Series -L-, and ArcelorMittal S.A. 5.5% at 2.54%, 2.3%, 1.79%, 1.49%, and 1.36%.
Danaher Corp PRF CONVERT 15/04/2022 USD – Ser A (1.35%), Danaher Corp 5% PRF PERPETUAL USD 1000 – Ser B (1.14%), and NextEra Energy Inc Unit (1.12%) have a slightly smaller but still significant weight. Citigroup Capital XIII Floating Rate Trust Pfd Secs Registered 2010-30.10.4 and Avantor Inc Ser A are also represented in the PFF’s holdings at 1.08% and 0.99%.
The iShares Core S&P Mid-Cap ETF (IJH) has a Standard Deviation of 16.8 with a Beta of 1.15 and a R-squared of 86.39. Its Mean Return is 1.13 while IJH’s Alpha is -4.01. Furthermore, the fund has a Sharpe Ratio of 0.77 and a Treynor Ratio of 10.55.
The iShares Preferred and Income Securities ETF (PFF) has a Standard Deviation of 7.87 with a Treynor Ratio of 6.79 and a Beta of 0.81. Its R-squared is 9.39 while PFF’s Mean Return is 0.52. Furthermore, the fund has a Alpha of 3.45 and a Sharpe Ratio of 0.72.
IJH’s Mean Return is 0.61 points higher than that of PFF and its R-squared is 77.00 points higher. With a Standard Deviation of 16.8, IJH is slightly more volatile than PFF. The Alpha and Beta of IJH are 7.46 points lower and 0.34 points higher than PFF’s Alpha and Beta.
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 2012 was the strongest year for PFF, returning 18.25% on an annual basis. The poorest year for PFF in the last ten years was 2018, with a yield of -4.77%. Most years the iShares Preferred and Income Securities ETF has given investors modest returns, such as in 2015, 2020, and 2017, when gains were 4.62%, 7.94%, and 8.33% 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 PFF, the end total would have been $20,272. This equates to a $10,272 profit over 11 years and a compound annual growth rate (CAGR) of 6.90%.
IJH’s CAGR is 6.60 percentage points higher than that of PFF and as a result, would have yielded $16,994 more on a $10,000 investment. Thus, IJH outperformed PFF by 6.60% annually.
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