IJH vs. USMV: What’s The Difference?

The iShares Core S&P Mid-Cap ETF (IJH) and the iShares MSCI USA Min Vol Factor ETF (USMV) are both among the Top 100 ETFs. IJH is a iShares Mid-Cap Blend fund and USMV is a iShares Large Blend fund. So, what’s the difference between IJH and USMV? And which fund is better?

The expense ratio of IJH is 0.10 percentage points lower than USMV’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 lower returns than USMV over the past ten years.

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

Summary

IJH USMV
Name iShares Core S&P Mid-Cap ETF iShares MSCI USA Min Vol Factor ETF
Category Mid-Cap Blend Large Blend
Issuer iShares iShares
AUM 63.4B 27.6B
Avg. Return 13.50% 13.89%
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 MSCI USA Min Vol Factor ETF (USMV) is a Large Blend fund that is issued by iShares. It currently has 27.6B total assets under management and has yielded an average annual return of 13.89% 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 USMV (1.07% vs. 1.5%). Also, IJH yielded on average 0.39% less per year over the past decade (13.50% vs. 13.89%). The expense ratio of IJH is 0.10 percentage points lower than USMV’s (0.05% vs. 0.15%).

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Fund Composition

Industry Exposure

IJH vs. USMV - Industry Exposure

IJH USMV
Technology 14.81% 20.53%
Industrials 18.09% 10.51%
Energy 2.5% 0.21%
Communication Services 1.57% 11.03%
Utilities 2.9% 6.93%
Healthcare 10.89% 18.42%
Consumer Defensive 4.02% 12.82%
Real Estate 10.04% 2.73%
Financial Services 14.85% 9.65%
Consumer Cyclical 14.91% 5.53%
Basic Materials 5.42% 1.65%

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 Min Vol Factor ETF (USMV) has the most exposure to the Technology sector at 20.53%. This is followed by Healthcare and Consumer Defensive at 18.42% and 12.82% respectively. Basic Materials (1.65%), Real Estate (2.73%), and Consumer Cyclical (5.53%) only make up 9.91% of the fund’s total assets.

USMV’s mid-section with moderate exposure is comprised of Utilities, Financial Services, Industrials, Communication Services, and Consumer Defensive stocks at 6.93%, 9.65%, 10.51%, 11.03%, and 12.82%.

IJH is 7.58% more exposed to the Industrials sector than USMV (18.09% vs 10.51%). IJH’s exposure to Consumer Cyclical and Financial Services stocks is 9.38% higher and 5.20% higher respectively (14.91% vs. 5.53% and 14.85% vs. 9.65%). In total, Energy, Utilities, and Consumer Defensive also make up 10.54% less of the fund’s holdings compared to USMV (9.42% vs. 19.96%).

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%.

USMV - Holdings

USMV Holdings Weight
Eli Lilly and Co 1.64%
Microsoft Corp 1.62%
T-Mobile US Inc 1.51%
Accenture PLC Class A 1.51%
Visa Inc Class A 1.49%
Waste Management Inc 1.45%
Adobe Inc 1.45%
The Kroger Co 1.44%
Johnson & Johnson 1.42%
Gilead Sciences Inc 1.42%

USMV’s Top Holdings are Eli Lilly and Co, Microsoft Corp, T-Mobile US Inc, Accenture PLC Class A, and Visa Inc Class A at 1.64%, 1.62%, 1.51%, 1.51%, and 1.49%.

Waste Management Inc (1.45%), Adobe Inc (1.45%), and The Kroger Co (1.44%) have a slightly smaller but still significant weight. Johnson & Johnson and Gilead Sciences Inc are also represented in the USMV’s holdings at 1.42% and 1.42%.

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Risk Analysis

IJH USMV
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 Sharpe Ratio of 0.77 and a Alpha of -4.01. Its Beta is 1.15 while IJH’s Standard Deviation is 16.8. Furthermore, the fund has a Treynor Ratio of 10.55 and a Mean Return of 1.13.

The iShares MSCI USA Min Vol Factor ETF (USMV) has a Treynor Ratio of 0 with a Sharpe Ratio of 0 and a Alpha of 0. Its Beta is 0 while USMV’s R-squared is 0. Furthermore, the fund has a Standard Deviation of 0 and a Mean Return of 0.

IJH’s Mean Return is 1.13 points higher than that of USMV and its R-squared is 86.39 points higher. With a Standard Deviation of 16.8, IJH is slightly more volatile than USMV. The Alpha and Beta of IJH are 4.01 points lower and 1.15 points higher than USMV’s Alpha and Beta.

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Performance

Annual Returns

IJH vs. USMV - Annual Returns

Year IJH USMV
2020 13.61% 5.6%
2019 26.14% 27.77%
2018 -11.14% 1.36%
2017 16.19% 18.97%
2016 20.63% 10.5%
2015 -2.23% 5.5%
2014 9.64% 16.34%
2013 33.4% 25.11%
2012 17.76% 11.04%
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 USMV, returning 27.77% on an annual basis. The poorest year for USMV in the last ten years was 2011, with a yield of 0.0%. Most years the iShares MSCI USA Min Vol Factor ETF has given investors modest returns, such as in 2020, 2016, and 2012, when gains were 5.6%, 10.5%, and 11.04% respectively.

Portfolio Growth

IJH vs. USMV - Portfolio Growth

Fund Initial Balance Final Balance CAGR
IJH $10,000 $25,522 13.50%
USMV $10,000 $27,607 13.89%

A $10,000 investment in IJH would have resulted in a final balance of $25,522. This is a profit of $15,522 over 8 years and amounts to a compound annual growth rate (CAGR) of 13.50%.

With a $10,000 investment in USMV, the end total would have been $27,607. This equates to a $17,607 profit over 8 years and a compound annual growth rate (CAGR) of 13.89%.

IJH’s CAGR is 0.39 percentage points lower than that of USMV and as a result, would have yielded $2,085 less on a $10,000 investment. Thus, IJH performed worse than USMV by 0.39% annually.


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