The iShares Core S&P Mid-Cap ETF (IJH) and the iShares MSCI USA Quality Factor ETF (QUAL) are both among the Top 100 ETFs. IJH is a iShares Mid-Cap Blend fund and QUAL is a iShares Large Blend fund. So, what’s the difference between IJH and QUAL? And which fund is better?
The expense ratio of IJH is 0.10 percentage points lower than QUAL’s (0.05% vs. 0.15%). IJH also has a higher exposure to the industrials sector and a higher standard deviation. Overall, IJH has provided higher returns than QUAL over the past ten years.
In this article, we’ll compare IJH vs. QUAL. We’ll look at fund composition and holdings, as well as at their portfolio growth and performance. Moreover, I’ll also discuss IJH’s and QUAL’s industry exposure, annual returns, and risk metrics and examine how these affect their overall returns.
Summary
| IJH | QUAL | |
| Name | iShares Core S&P Mid-Cap ETF | iShares MSCI USA Quality Factor ETF |
| Category | Mid-Cap Blend | Large Blend |
| Issuer | iShares | iShares |
| AUM | 63.4B | 23.93B |
| Avg. Return | 13.50% | 13.42% |
| Div. Yield | 1.07% | 1.29% |
| Expense Ratio | 0.05% | 0.15% |
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 MSCI USA Quality Factor ETF (QUAL) is a Large Blend fund that is issued by iShares. It currently has 23.93B total assets under management and has yielded an average annual return of 13.42% over the past 10 years. The fund has a dividend yield of 1.29% with an expense ratio of 0.15%.
IJH’s dividend yield is 0.22% lower than that of QUAL (1.07% vs. 1.29%). Also, IJH yielded on average 0.08% more per year over the past decade (13.50% vs. 13.42%). The expense ratio of IJH is 0.10 percentage points lower than QUAL’s (0.05% vs. 0.15%).
Fund Composition
Industry Exposure
| IJH | QUAL | |
| Technology | 14.81% | 22.52% |
| Industrials | 18.09% | 9.22% |
| Energy | 2.5% | 2.24% |
| Communication Services | 1.57% | 11.44% |
| Utilities | 2.9% | 2.41% |
| Healthcare | 10.89% | 13.22% |
| Consumer Defensive | 4.02% | 8.57% |
| Real Estate | 10.04% | 2.72% |
| Financial Services | 14.85% | 15.87% |
| Consumer Cyclical | 14.91% | 9.43% |
| Basic Materials | 5.42% | 2.35% |
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 MSCI USA Quality Factor ETF (QUAL) has the most exposure to the Technology sector at 22.52%. This is followed by Financial Services and Healthcare at 15.87% and 13.22% respectively. Basic Materials (2.35%), Utilities (2.41%), and Real Estate (2.72%) only make up 7.48% of the fund’s total assets.
QUAL’s mid-section with moderate exposure is comprised of Consumer Defensive, Industrials, Consumer Cyclical, Communication Services, and Healthcare stocks at 8.57%, 9.22%, 9.43%, 11.44%, and 13.22%.
IJH is 8.87% more exposed to the Industrials sector than QUAL (18.09% vs 9.22%). IJH’s exposure to Consumer Cyclical and Financial Services stocks is 5.48% higher and 1.02% lower respectively (14.91% vs. 9.43% and 14.85% vs. 15.87%). In total, Energy, Utilities, and Consumer Defensive also make up 3.80% less of the fund’s holdings compared to QUAL (9.42% vs. 13.22%).
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%.
| QUAL Holdings | Weight |
| Facebook Inc Class A | 4.77% |
| Nike Inc Class B | 4.05% |
| Microsoft Corp | 3.54% |
| Apple Inc | 3.52% |
| Johnson & Johnson | 2.99% |
| BlackRock Inc | 2.87% |
| Target Corp | 2.8% |
| Mastercard Inc Class A | 2.72% |
| NVIDIA Corp | 2.71% |
| Alphabet Inc Class A | 2.49% |
QUAL’s Top Holdings are Facebook Inc Class A, Nike Inc Class B, Microsoft Corp, Apple Inc, and Johnson & Johnson at 4.77%, 4.05%, 3.54%, 3.52%, and 2.99%.
BlackRock Inc (2.87%), Target Corp (2.8%), and Mastercard Inc Class A (2.72%) have a slightly smaller but still significant weight. NVIDIA Corp and Alphabet Inc Class A are also represented in the QUAL’s holdings at 2.71% and 2.49%.
Risk Analysis
| IJH | QUAL | |
| Mean Return | 1.13 | 0 |
| R-squared | 86.39 | 0 |
| Std. Deviation | 16.8 | 0 |
| Alpha | -4.01 | 0 |
| Beta | 1.15 | 0 |
| Sharpe Ratio | 0.77 | 0 |
| Treynor Ratio | 10.55 | 0 |
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 Beta is 1.15 while IJH’s Alpha is -4.01. Furthermore, the fund has a Treynor Ratio of 10.55 and a Sharpe Ratio of 0.77.
The iShares MSCI USA Quality Factor ETF (QUAL) has a Treynor Ratio of 0 with a Sharpe Ratio of 0 and a Mean Return of 0. Its Alpha is 0 while QUAL’s R-squared is 0. Furthermore, the fund has a Beta of 0 and a Standard Deviation of 0.
IJH’s Mean Return is 1.13 points higher than that of QUAL and its R-squared is 86.39 points higher. With a Standard Deviation of 16.8, IJH is slightly more volatile than QUAL. The Alpha and Beta of IJH are 4.01 points lower and 1.15 points higher than QUAL’s Alpha and Beta.
Performance
Annual Returns
| Year | IJH | QUAL |
| 2020 | 13.61% | 16.96% |
| 2019 | 26.14% | 34.14% |
| 2018 | -11.14% | -5.77% |
| 2017 | 16.19% | 22.26% |
| 2016 | 20.63% | 9.18% |
| 2015 | -2.23% | 5.56% |
| 2014 | 9.64% | 11.62% |
| 2013 | 33.4% | 0.0% |
| 2012 | 17.76% | 0.0% |
| 2011 | -1.89% | 0.0% |
| 2010 | 26.38% | 0.0% |
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 QUAL, returning 34.14% on an annual basis. The poorest year for QUAL in the last ten years was 2018, with a yield of -5.77%. Most years the iShares MSCI USA Quality Factor ETF has given investors modest returns, such as in 2010, 2015, and 2016, when gains were 0.0%, 5.56%, and 9.18% respectively.
Portfolio Growth
| Fund | Initial Balance | Final Balance | CAGR |
| IJH | $10,000 | $19,132 | 13.50% |
| QUAL | $10,000 | $23,251 | 13.42% |
A $10,000 investment in IJH would have resulted in a final balance of $19,132. This is a profit of $9,132 over 7 years and amounts to a compound annual growth rate (CAGR) of 13.50%.
With a $10,000 investment in QUAL, the end total would have been $23,251. This equates to a $13,251 profit over 7 years and a compound annual growth rate (CAGR) of 13.42%.
IJH’s CAGR is 0.08 percentage points higher than that of QUAL and as a result, would have yielded $4,119 less on a $10,000 investment. Thus, IJH outperformed QUAL by 0.08% annually.
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