IJH vs. TLT: What’s The Difference?

The iShares Core S&P Mid-Cap ETF (IJH) and the iShares 20+ Year Treasury Bond ETF (TLT) are both among the Top 100 ETFs. IJH is a iShares Mid-Cap Blend fund and TLT is a iShares Long Government fund. So, what’s the difference between IJH and TLT? And which fund is better?

The expense ratio of IJH is 0.10 percentage points lower than TLT’s (0.05% vs. 0.15%). IJH also has a high exposure to the industrials sector while TLT is mostly comprised of AAA bonds. Overall, IJH has provided higher returns than TLT over the past ten years.

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

Summary

IJH TLT
Name iShares Core S&P Mid-Cap ETF iShares 20+ Year Treasury Bond ETF
Category Mid-Cap Blend Long Government
Issuer iShares iShares
AUM 63.4B 15.15B
Avg. Return 13.50% 9.00%
Div. Yield 1.07% 1.5%
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 20+ Year Treasury Bond ETF (TLT) is a Long Government fund that is issued by iShares. It currently has 15.15B total assets under management and has yielded an average annual return of 9.00% over the past 10 years. The fund has a dividend yield of 1.5% with an expense ratio of 0.15%.

IJH’s dividend yield is 0.43% lower than that of TLT (1.07% vs. 1.5%). Also, IJH yielded on average 4.50% more per year over the past decade (13.50% vs. 9.00%). The expense ratio of IJH is 0.10 percentage points lower than TLT’s (0.05% vs. 0.15%).

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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%.

TLT - Holdings

TLT Bond Sectors Weight
AAA 100.0%
Others 0.0%
Below B 0.0%
B 0.0%
BB 0.0%
BBB 0.0%
A 0.0%
AA 0.0%
US Government 0.0%

TLT’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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Risk Analysis

IJH TLT
Mean Return 1.13 0.63
R-squared 86.39 68.76
Std. Deviation 16.8 12.76
Alpha -4.01 -2.83
Beta 1.15 3.54
Sharpe Ratio 0.77 0.55
Treynor Ratio 10.55 1.82

The iShares Core S&P Mid-Cap ETF (IJH) has a Treynor Ratio of 10.55 with a Beta of 1.15 and a Alpha of -4.01. Its R-squared is 86.39 while IJH’s Sharpe Ratio is 0.77. Furthermore, the fund has a Mean Return of 1.13 and a Standard Deviation of 16.8.

The iShares 20+ Year Treasury Bond ETF (TLT) has a Beta of 3.54 with a R-squared of 68.76 and a Alpha of -2.83. Its Sharpe Ratio is 0.55 while TLT’s Mean Return is 0.63. Furthermore, the fund has a Standard Deviation of 12.76 and a Treynor Ratio of 1.82.

IJH’s Mean Return is 0.50 points higher than that of TLT and its R-squared is 17.63 points higher. With a Standard Deviation of 16.8, IJH is slightly more volatile than TLT. The Alpha and Beta of IJH are 1.18 points lower and 2.39 points lower than TLT’s Alpha and Beta.

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Performance

Annual Returns

IJH vs. TLT - Annual Returns

Year IJH TLT
2020 13.61% 17.92%
2019 26.14% 14.93%
2018 -11.14% -2.07%
2017 16.19% 8.92%
2016 20.63% 1.36%
2015 -2.23% -1.65%
2014 9.64% 27.35%
2013 33.4% -13.91%
2012 17.76% 3.25%
2011 -1.89% 33.6%
2010 26.38% 9.25%

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 TLT, returning 33.6% on an annual basis. The poorest year for TLT in the last ten years was 2013, with a yield of -13.91%. Most years the iShares 20+ Year Treasury Bond ETF has given investors modest returns, such as in 2012, 2017, and 2010, when gains were 3.25%, 8.92%, and 9.25% respectively.

Portfolio Growth

IJH vs. TLT - Portfolio Growth

Fund Initial Balance Final Balance CAGR
IJH $10,000 $37,266 13.50%
TLT $10,000 $23,809 9.00%

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 TLT, the end total would have been $23,809. This equates to a $13,809 profit over 11 years and a compound annual growth rate (CAGR) of 9.00%.

IJH’s CAGR is 4.50 percentage points higher than that of TLT and as a result, would have yielded $13,457 more on a $10,000 investment. Thus, IJH outperformed TLT by 4.50% annually.


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