IJH vs. VBK: What’s The Difference?

The iShares Core S&P Mid-Cap ETF (IJH) and the Vanguard Small-Cap Growth Index Fund ETF Shares (VBK) are both among the Top 100 ETFs. IJH is a iShares Mid-Cap Blend fund and VBK is a Vanguard Small Growth fund. So, what’s the difference between IJH and VBK? And which fund is better?

The expense ratio of IJH is 0.02 percentage points lower than VBK’s (0.05% vs. 0.07%). IJH also has a higher exposure to the industrials sector and a lower standard deviation. Overall, IJH has provided lower returns than VBK over the past ten years.

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

Summary

IJH VBK
Name iShares Core S&P Mid-Cap ETF Vanguard Small-Cap Growth Index Fund ETF Shares
Category Mid-Cap Blend Small Growth
Issuer iShares Vanguard
AUM 63.4B 37.89B
Avg. Return 13.50% 16.53%
Div. Yield 1.07% 0.45%
Expense Ratio 0.05% 0.07%

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 Vanguard Small-Cap Growth Index Fund ETF Shares (VBK) is a Small Growth fund that is issued by Vanguard. It currently has 37.89B total assets under management and has yielded an average annual return of 16.53% over the past 10 years. The fund has a dividend yield of 0.45% with an expense ratio of 0.07%.

IJH’s dividend yield is 0.62% higher than that of VBK (1.07% vs. 0.45%). Also, IJH yielded on average 3.03% less per year over the past decade (13.50% vs. 16.53%). The expense ratio of IJH is 0.02 percentage points lower than VBK’s (0.05% vs. 0.07%).

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Fund Composition

Industry Exposure

IJH vs. VBK - Industry Exposure

IJH VBK
Technology 14.81% 27.87%
Industrials 18.09% 13.19%
Energy 2.5% 1.77%
Communication Services 1.57% 3.24%
Utilities 2.9% 0.32%
Healthcare 10.89% 23.24%
Consumer Defensive 4.02% 3.83%
Real Estate 10.04% 7.87%
Financial Services 14.85% 4.05%
Consumer Cyclical 14.91% 12.13%
Basic Materials 5.42% 2.49%

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 Vanguard Small-Cap Growth Index Fund ETF Shares (VBK) has the most exposure to the Technology sector at 27.87%. This is followed by Healthcare and Industrials at 23.24% and 13.19% respectively. Energy (1.77%), Basic Materials (2.49%), and Communication Services (3.24%) only make up 7.50% of the fund’s total assets.

VBK’s mid-section with moderate exposure is comprised of Consumer Defensive, Financial Services, Real Estate, Consumer Cyclical, and Industrials stocks at 3.83%, 4.05%, 7.87%, 12.13%, and 13.19%.

IJH is 4.90% more exposed to the Industrials sector than VBK (18.09% vs 13.19%). IJH’s exposure to Consumer Cyclical and Financial Services stocks is 2.78% higher and 10.80% higher respectively (14.91% vs. 12.13% and 14.85% vs. 4.05%). In total, Energy, Utilities, and Consumer Defensive also make up 3.50% more of the fund’s holdings compared to VBK (9.42% vs. 5.92%).

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%.

VBK - Holdings

VBK Holdings Weight
Charles River Laboratories International Inc 0.78%
Pool Corp 0.73%
Bio-Techne Corp 0.73%
Avantor Inc 0.73%
PerkinElmer Inc 0.72%
Entegris Inc 0.7%
PTC Inc 0.62%
Fair Isaac Corp 0.57%
Bill.com Holdings Inc Ordinary Shares 0.56%
Avalara Inc 0.55%

VBK’s Top Holdings are Charles River Laboratories International Inc, Pool Corp, Bio-Techne Corp, Avantor Inc, and PerkinElmer Inc at 0.78%, 0.73%, 0.73%, 0.73%, and 0.72%.

Entegris Inc (0.7%), PTC Inc (0.62%), and Fair Isaac Corp (0.57%) have a slightly smaller but still significant weight. Bill.com Holdings Inc Ordinary Shares and Avalara Inc are also represented in the VBK’s holdings at 0.56% and 0.55%.

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Risk Analysis

IJH VBK
Mean Return 1.13 1.22
R-squared 86.39 80.56
Std. Deviation 16.8 17.95
Alpha -4.01 -2.81
Beta 1.15 1.18
Sharpe Ratio 0.77 0.78
Treynor Ratio 10.55 11.18

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

The Vanguard Small-Cap Growth Index Fund ETF Shares (VBK) has a Standard Deviation of 17.95 with a R-squared of 80.56 and a Sharpe Ratio of 0.78. Its Beta is 1.18 while VBK’s Mean Return is 1.22. Furthermore, the fund has a Alpha of -2.81 and a Treynor Ratio of 11.18.

IJH’s Mean Return is 0.09 points lower than that of VBK and its R-squared is 5.83 points higher. With a Standard Deviation of 16.8, IJH is slightly less volatile than VBK. The Alpha and Beta of IJH are 1.20 points lower and 0.03 points lower than VBK’s Alpha and Beta.

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Performance

Annual Returns

IJH vs. VBK - Annual Returns

Year IJH VBK
2020 13.61% 35.29%
2019 26.14% 32.75%
2018 -11.14% -5.68%
2017 16.19% 21.9%
2016 20.63% 10.74%
2015 -2.23% -2.51%
2014 9.64% 4.02%
2013 33.4% 38.18%
2012 17.76% 17.67%
2011 -1.89% -1.43%
2010 26.38% 30.87%

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 2013 was the strongest year for VBK, returning 38.18% on an annual basis. The poorest year for VBK in the last ten years was 2018, with a yield of -5.68%. Most years the Vanguard Small-Cap Growth Index Fund ETF Shares has given investors modest returns, such as in 2016, 2012, and 2017, when gains were 10.74%, 17.67%, and 21.9% respectively.

Portfolio Growth

IJH vs. VBK - Portfolio Growth

Fund Initial Balance Final Balance CAGR
IJH $10,000 $37,266 13.50%
VBK $10,000 $48,639 16.53%

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 VBK, the end total would have been $48,639. This equates to a $38,639 profit over 11 years and a compound annual growth rate (CAGR) of 16.53%.

IJH’s CAGR is 3.03 percentage points lower than that of VBK and as a result, would have yielded $11,373 less on a $10,000 investment. Thus, IJH performed worse than VBK by 3.03% annually.


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