IJH vs. VCIT: What’s The Difference?

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

IJH and VCIT have the same expense ratio: 0.05%. IJH also has a high exposure to the industrials sector while VCIT is mostly comprised of BBB bonds. Overall, IJH has provided higher returns than VCIT over the past ten years.

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

Summary

IJH VCIT
Name iShares Core S&P Mid-Cap ETF Vanguard Intermediate-Term Corporate Bond Index Fund ETF Shares
Category Mid-Cap Blend Corporate Bond
Issuer iShares Vanguard
AUM 63.4B 48.39B
Avg. Return 13.50% 5.84%
Div. Yield 1.07% 2.33%
Expense Ratio 0.05% 0.05%

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 Intermediate-Term Corporate Bond Index Fund ETF Shares (VCIT) is a Corporate Bond fund that is issued by Vanguard. It currently has 48.39B total assets under management and has yielded an average annual return of 5.84% over the past 10 years. The fund has a dividend yield of 2.33% with an expense ratio of 0.05%.

IJH’s dividend yield is 1.26% lower than that of VCIT (1.07% vs. 2.33%). Also, IJH yielded on average 7.66% more per year over the past decade (13.50% vs. 5.84%). IJH and VCIT have the same expense ratio: 0.05%.

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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%.

VCIT - Holdings

VCIT Bond Sectors Weight
BBB 55.28%
A 37.85%
AA 5.22%
AAA 1.57%
Below B 0.08%
Others 0.0%
B 0.0%
BB 0.0%
US Government 0.0%

VCIT’s Top Bond Sectors are ratings of BBB, A, AA, AAA, and Below B at 55.28%, 37.85%, 5.22%, 1.57%, and 0.08%. The fund is less weighted towards Others (0.0%), B (0.0%), and BB (0.0%) rated bonds.

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Risk Analysis

IJH VCIT
Mean Return 1.13 0.44
R-squared 86.39 63.18
Std. Deviation 16.8 5.08
Alpha -4.01 0.89
Beta 1.15 1.35
Sharpe Ratio 0.77 0.91
Treynor Ratio 10.55 3.43

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

The Vanguard Intermediate-Term Corporate Bond Index Fund ETF Shares (VCIT) has a Sharpe Ratio of 0.91 with a Standard Deviation of 5.08 and a R-squared of 63.18. Its Beta is 1.35 while VCIT’s Mean Return is 0.44. Furthermore, the fund has a Alpha of 0.89 and a Treynor Ratio of 3.43.

IJH’s Mean Return is 0.69 points higher than that of VCIT and its R-squared is 23.21 points higher. With a Standard Deviation of 16.8, IJH is slightly more volatile than VCIT. The Alpha and Beta of IJH are 4.90 points lower and 0.20 points lower than VCIT’s Alpha and Beta.

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Performance

Annual Returns

IJH vs. VCIT - Annual Returns

Year IJH VCIT
2020 13.61% 9.55%
2019 26.14% 13.97%
2018 -11.14% -1.75%
2017 16.19% 5.5%
2016 20.63% 5.3%
2015 -2.23% 0.88%
2014 9.64% 7.47%
2013 33.4% -1.8%
2012 17.76% 11.36%
2011 -1.89% 7.94%
2010 26.38% 10.65%

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 VCIT, returning 13.97% on an annual basis. The poorest year for VCIT in the last ten years was 2013, with a yield of -1.8%. Most years the Vanguard Intermediate-Term Corporate Bond Index Fund ETF Shares has given investors modest returns, such as in 2017, 2014, and 2011, when gains were 5.5%, 7.47%, and 7.94% respectively.

Portfolio Growth

IJH vs. VCIT - Portfolio Growth

Fund Initial Balance Final Balance CAGR
IJH $10,000 $29,487 13.50%
VCIT $10,000 $17,439 5.84%

A $10,000 investment in IJH would have resulted in a final balance of $29,487. This is a profit of $19,487 over 10 years and amounts to a compound annual growth rate (CAGR) of 13.50%.

With a $10,000 investment in VCIT, the end total would have been $17,439. This equates to a $7,439 profit over 10 years and a compound annual growth rate (CAGR) of 5.84%.

IJH’s CAGR is 7.66 percentage points higher than that of VCIT and as a result, would have yielded $12,048 more on a $10,000 investment. Thus, IJH outperformed VCIT by 7.66% annually.


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