The iShares Core S&P Mid-Cap ETF (IJH) and the Vanguard Small-Cap Value Index Fund ETF Shares (VBR) are both among the Top 100 ETFs. IJH is a iShares Mid-Cap Blend fund and VBR is a Vanguard Small Value fund. So, what’s the difference between IJH and VBR? And which fund is better?
The expense ratio of IJH is 0.02 percentage points lower than VBR’s (0.05% vs. 0.07%). IJH also has a lower exposure to the industrials sector and a lower standard deviation. Overall, IJH has provided higher returns than VBR over the past ten years.
In this article, we’ll compare IJH vs. VBR. We’ll look at performance and holdings, as well as at their risk metrics and industry exposure. Moreover, I’ll also discuss IJH’s and VBR’s annual returns, fund composition, and portfolio growth and examine how these affect their overall returns.
Summary
| IJH | VBR | |
| Name | iShares Core S&P Mid-Cap ETF | Vanguard Small-Cap Value Index Fund ETF Shares |
| Category | Mid-Cap Blend | Small Value |
| Issuer | iShares | Vanguard |
| AUM | 63.4B | 48.08B |
| Avg. Return | 13.50% | 12.28% |
| Div. Yield | 1.07% | 1.6% |
| 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 Value Index Fund ETF Shares (VBR) is a Small Value fund that is issued by Vanguard. It currently has 48.08B total assets under management and has yielded an average annual return of 12.28% over the past 10 years. The fund has a dividend yield of 1.6% with an expense ratio of 0.07%.
IJH’s dividend yield is 0.53% lower than that of VBR (1.07% vs. 1.6%). Also, IJH yielded on average 1.22% more per year over the past decade (13.50% vs. 12.28%). The expense ratio of IJH is 0.02 percentage points lower than VBR’s (0.05% vs. 0.07%).
Fund Composition
Industry Exposure
| IJH | VBR | |
| Technology | 14.81% | 8.39% |
| Industrials | 18.09% | 18.44% |
| Energy | 2.5% | 5.15% |
| Communication Services | 1.57% | 1.77% |
| Utilities | 2.9% | 3.65% |
| Healthcare | 10.89% | 7.16% |
| Consumer Defensive | 4.02% | 4.36% |
| Real Estate | 10.04% | 10.92% |
| Financial Services | 14.85% | 20.04% |
| Consumer Cyclical | 14.91% | 13.82% |
| Basic Materials | 5.42% | 6.31% |
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 Value Index Fund ETF Shares (VBR) has the most exposure to the Financial Services sector at 20.04%. This is followed by Industrials and Consumer Cyclical at 18.44% and 13.82% respectively. Utilities (3.65%), Consumer Defensive (4.36%), and Energy (5.15%) only make up 13.16% of the fund’s total assets.
VBR’s mid-section with moderate exposure is comprised of Basic Materials, Healthcare, Technology, Real Estate, and Consumer Cyclical stocks at 6.31%, 7.16%, 8.39%, 10.92%, and 13.82%.
IJH is 0.35% less exposed to the Industrials sector than VBR (18.09% vs 18.44%). IJH’s exposure to Consumer Cyclical and Financial Services stocks is 1.09% higher and 5.19% lower respectively (14.91% vs. 13.82% and 14.85% vs. 20.04%). In total, Energy, Utilities, and Consumer Defensive also make up 3.74% less of the fund’s holdings compared to VBR (9.42% vs. 13.16%).
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%.
| VBR Holdings | Weight |
| Diamondback Energy Inc | 0.55% |
| VICI Properties Inc Ordinary Shares | 0.54% |
| IDEX Corp | 0.54% |
| Nuance Communications Inc | 0.5% |
| Molina Healthcare Inc | 0.48% |
| Signature Bank | 0.46% |
| Novavax Inc | 0.44% |
| Howmet Aerospace Inc | 0.44% |
| Apollo Global Management Inc Class A | 0.42% |
| Brown & Brown Inc | 0.41% |
VBR’s Top Holdings are Diamondback Energy Inc, VICI Properties Inc Ordinary Shares, IDEX Corp, Nuance Communications Inc, and Molina Healthcare Inc at 0.55%, 0.54%, 0.54%, 0.5%, and 0.48%.
Signature Bank (0.46%), Novavax Inc (0.44%), and Howmet Aerospace Inc (0.44%) have a slightly smaller but still significant weight. Apollo Global Management Inc Class A and Brown & Brown Inc are also represented in the VBR’s holdings at 0.42% and 0.41%.
Risk Analysis
| IJH | VBR | |
| Mean Return | 1.13 | 1.08 |
| R-squared | 86.39 | 82.2 |
| Std. Deviation | 16.8 | 18.37 |
| Alpha | -4.01 | -5.09 |
| Beta | 1.15 | 1.23 |
| Sharpe Ratio | 0.77 | 0.67 |
| Treynor Ratio | 10.55 | 9.15 |
The iShares Core S&P Mid-Cap ETF (IJH) has a Treynor Ratio of 10.55 with a Mean Return of 1.13 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 Beta of 1.15 and a Standard Deviation of 16.8.
The Vanguard Small-Cap Value Index Fund ETF Shares (VBR) has a Standard Deviation of 18.37 with a Sharpe Ratio of 0.67 and a Beta of 1.23. Its Treynor Ratio is 9.15 while VBR’s Alpha is -5.09. Furthermore, the fund has a Mean Return of 1.08 and a R-squared of 82.2.
IJH’s Mean Return is 0.05 points higher than that of VBR and its R-squared is 4.19 points higher. With a Standard Deviation of 16.8, IJH is slightly less volatile than VBR. The Alpha and Beta of IJH are 1.08 points higher and 0.08 points lower than VBR’s Alpha and Beta.
Performance
Annual Returns
| Year | IJH | VBR |
| 2020 | 13.61% | 5.82% |
| 2019 | 26.14% | 22.76% |
| 2018 | -11.14% | -12.22% |
| 2017 | 16.19% | 11.79% |
| 2016 | 20.63% | 24.8% |
| 2015 | -2.23% | -4.67% |
| 2014 | 9.64% | 10.55% |
| 2013 | 33.4% | 36.57% |
| 2012 | 17.76% | 18.78% |
| 2011 | -1.89% | -4.05% |
| 2010 | 26.38% | 24.97% |
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 VBR, returning 36.57% on an annual basis. The poorest year for VBR in the last ten years was 2018, with a yield of -12.22%. Most years the Vanguard Small-Cap Value Index Fund ETF Shares has given investors modest returns, such as in 2014, 2017, and 2012, when gains were 10.55%, 11.79%, and 18.78% respectively.
Portfolio Growth
| Fund | Initial Balance | Final Balance | CAGR |
| IJH | $10,000 | $37,266 | 13.50% |
| VBR | $10,000 | $32,611 | 12.28% |
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 VBR, the end total would have been $32,611. This equates to a $22,611 profit over 11 years and a compound annual growth rate (CAGR) of 12.28%.
IJH’s CAGR is 1.22 percentage points higher than that of VBR and as a result, would have yielded $4,655 more on a $10,000 investment. Thus, IJH outperformed VBR by 1.22% annually.
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