The iShares Core S&P Mid-Cap ETF (IJH) and the Vanguard Short-Term Corporate Bond Index Fund ETF Shares (VCSH) are both among the Top 100 ETFs. IJH is a iShares Mid-Cap Blend fund and VCSH is a Vanguard Short-Term Bond fund. So, what’s the difference between IJH and VCSH? And which fund is better?
IJH and VCSH have the same expense ratio: 0.05%. IJH also has a high exposure to the industrials sector while VCSH is mostly comprised of BBB bonds. Overall, IJH has provided higher returns than VCSH over the past ten years.
In this article, we’ll compare IJH vs. VCSH. We’ll look at holdings and annual returns, as well as at their industry exposure and portfolio growth. Moreover, I’ll also discuss IJH’s and VCSH’s performance, fund composition, and risk metrics and examine how these affect their overall returns.
Summary
| IJH | VCSH | |
| Name | iShares Core S&P Mid-Cap ETF | Vanguard Short-Term Corporate Bond Index Fund ETF Shares |
| Category | Mid-Cap Blend | Short-Term Bond |
| Issuer | iShares | Vanguard |
| AUM | 63.4B | 47.88B |
| Avg. Return | 13.50% | 3.12% |
| Div. Yield | 1.07% | 1.89% |
| 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 Short-Term Corporate Bond Index Fund ETF Shares (VCSH) is a Short-Term Bond fund that is issued by Vanguard. It currently has 47.88B total assets under management and has yielded an average annual return of 3.12% over the past 10 years. The fund has a dividend yield of 1.89% with an expense ratio of 0.05%.
IJH’s dividend yield is 0.82% lower than that of VCSH (1.07% vs. 1.89%). Also, IJH yielded on average 10.38% more per year over the past decade (13.50% vs. 3.12%). IJH and VCSH have the same expense ratio: 0.05%.
Fund Composition
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%.
| VCSH Bond Sectors | Weight |
| BBB | 47.49% |
| A | 43.06% |
| AA | 8.45% |
| AAA | 0.95% |
| Below B | 0.03% |
| Others | 0.02% |
| B | 0.0% |
| BB | 0.0% |
| US Government | 0.0% |
VCSH’s Top Bond Sectors are ratings of BBB, A, AA, AAA, and Below B at 47.49%, 43.06%, 8.45%, 0.95%, and 0.03%. The fund is less weighted towards Others (0.02%), B (0.0%), and BB (0.0%) rated bonds.
Risk Analysis
| IJH | VCSH | |
| Mean Return | 1.13 | 0.24 |
| R-squared | 86.39 | 37.53 |
| Std. Deviation | 16.8 | 2.34 |
| Alpha | -4.01 | 0.93 |
| Beta | 1.15 | 0.48 |
| Sharpe Ratio | 0.77 | 0.97 |
| Treynor Ratio | 10.55 | 4.75 |
The iShares Core S&P Mid-Cap ETF (IJH) has a Mean Return of 1.13 with a Beta of 1.15 and a Alpha of -4.01. Its Standard Deviation is 16.8 while IJH’s Treynor Ratio is 10.55. Furthermore, the fund has a Sharpe Ratio of 0.77 and a R-squared of 86.39.
The Vanguard Short-Term Corporate Bond Index Fund ETF Shares (VCSH) has a R-squared of 37.53 with a Mean Return of 0.24 and a Alpha of 0.93. Its Sharpe Ratio is 0.97 while VCSH’s Beta is 0.48. Furthermore, the fund has a Standard Deviation of 2.34 and a Treynor Ratio of 4.75.
IJH’s Mean Return is 0.89 points higher than that of VCSH and its R-squared is 48.86 points higher. With a Standard Deviation of 16.8, IJH is slightly more volatile than VCSH. The Alpha and Beta of IJH are 4.94 points lower and 0.67 points higher than VCSH’s Alpha and Beta.
Performance
Annual Returns
| Year | IJH | VCSH |
| 2020 | 13.61% | 5.08% |
| 2019 | 26.14% | 6.85% |
| 2018 | -11.14% | 0.91% |
| 2017 | 16.19% | 2.45% |
| 2016 | 20.63% | 2.63% |
| 2015 | -2.23% | 1.25% |
| 2014 | 9.64% | 1.96% |
| 2013 | 33.4% | 1.37% |
| 2012 | 17.76% | 5.74% |
| 2011 | -1.89% | 2.94% |
| 2010 | 26.38% | 5.51% |
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 VCSH, returning 6.85% on an annual basis. The poorest year for VCSH in the last ten years was 2018, with a yield of 0.91%. Most years the Vanguard Short-Term Corporate Bond Index Fund ETF Shares has given investors modest returns, such as in 2017, 2016, and 2011, when gains were 2.45%, 2.63%, and 2.94% respectively.
Portfolio Growth
| Fund | Initial Balance | Final Balance | CAGR |
| IJH | $10,000 | $29,487 | 13.50% |
| VCSH | $10,000 | $13,569 | 3.12% |
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 VCSH, the end total would have been $13,569. This equates to a $3,569 profit over 10 years and a compound annual growth rate (CAGR) of 3.12%.
IJH’s CAGR is 10.38 percentage points higher than that of VCSH and as a result, would have yielded $15,918 more on a $10,000 investment. Thus, IJH outperformed VCSH by 10.38% annually.
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