IJH vs. VEU: What’s The Difference?

The iShares Core S&P Mid-Cap ETF (IJH) and the Vanguard FTSE All-World ex-US Index Fund ETF Shares (VEU) are both among the Top 100 ETFs. IJH is a iShares Mid-Cap Blend fund and VEU is a Vanguard Foreign Large Blend fund. So, what’s the difference between IJH and VEU? And which fund is better?

The expense ratio of IJH is 0.03 percentage points lower than VEU’s (0.05% vs. 0.08%). IJH also has a higher exposure to the industrials sector and a higher standard deviation. Overall, IJH has provided higher returns than VEU over the past ten years.

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

Summary

IJH VEU
Name iShares Core S&P Mid-Cap ETF Vanguard FTSE All-World ex-US Index Fund ETF Shares
Category Mid-Cap Blend Foreign Large Blend
Issuer iShares Vanguard
AUM 63.4B 53.64B
Avg. Return 13.50% 6.64%
Div. Yield 1.07% 2.31%
Expense Ratio 0.05% 0.08%

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 FTSE All-World ex-US Index Fund ETF Shares (VEU) is a Foreign Large Blend fund that is issued by Vanguard. It currently has 53.64B total assets under management and has yielded an average annual return of 6.64% over the past 10 years. The fund has a dividend yield of 2.31% with an expense ratio of 0.08%.

IJH’s dividend yield is 1.24% lower than that of VEU (1.07% vs. 2.31%). Also, IJH yielded on average 6.86% more per year over the past decade (13.50% vs. 6.64%). The expense ratio of IJH is 0.03 percentage points lower than VEU’s (0.05% vs. 0.08%).

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Fund Composition

Industry Exposure

IJH vs. VEU - Industry Exposure

IJH VEU
Technology 14.81% 12.94%
Industrials 18.09% 12.19%
Energy 2.5% 4.69%
Communication Services 1.57% 7.44%
Utilities 2.9% 2.89%
Healthcare 10.89% 9.34%
Consumer Defensive 4.02% 8.28%
Real Estate 10.04% 3.04%
Financial Services 14.85% 18.46%
Consumer Cyclical 14.91% 12.57%
Basic Materials 5.42% 8.17%

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 FTSE All-World ex-US Index Fund ETF Shares (VEU) has the most exposure to the Financial Services sector at 18.46%. This is followed by Technology and Consumer Cyclical at 12.94% and 12.57% respectively. Real Estate (3.04%), Energy (4.69%), and Communication Services (7.44%) only make up 15.17% of the fund’s total assets.

VEU’s mid-section with moderate exposure is comprised of Basic Materials, Consumer Defensive, Healthcare, Industrials, and Consumer Cyclical stocks at 8.17%, 8.28%, 9.34%, 12.19%, and 12.57%.

IJH is 5.90% more exposed to the Industrials sector than VEU (18.09% vs 12.19%). IJH’s exposure to Consumer Cyclical and Financial Services stocks is 2.34% higher and 3.61% lower respectively (14.91% vs. 12.57% and 14.85% vs. 18.46%). In total, Energy, Utilities, and Consumer Defensive also make up 6.44% less of the fund’s holdings compared to VEU (9.42% vs. 15.86%).

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%.

VEU - Holdings

VEU Holdings Weight
Tencent Holdings Ltd 1.57%
Alibaba Group Holding Ltd Ordinary Shares 1.4%
Nestle SA 1.22%
Taiwan Semiconductor Manufacturing Co Ltd 0.98%
ASML Holding NV 0.95%
Taiwan Semiconductor Manufacturing Co Ltd ADR 0.91%
Roche Holding AG 0.91%
Toyota Motor Corp 0.75%
LVMH Moet Hennessy Louis Vuitton SE 0.68%
Novartis AG 0.67%

VEU’s Top Holdings are Tencent Holdings Ltd, Alibaba Group Holding Ltd Ordinary Shares, Nestle SA, Taiwan Semiconductor Manufacturing Co Ltd, and ASML Holding NV at 1.57%, 1.4%, 1.22%, 0.98%, and 0.95%.

Taiwan Semiconductor Manufacturing Co Ltd ADR (0.91%), Roche Holding AG (0.91%), and Toyota Motor Corp (0.75%) have a slightly smaller but still significant weight. LVMH Moet Hennessy Louis Vuitton SE and Novartis AG are also represented in the VEU’s holdings at 0.68% and 0.67%.

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Risk Analysis

IJH VEU
Mean Return 1.13 0.56
R-squared 86.39 98.44
Std. Deviation 16.8 15.08
Alpha -4.01 0.28
Beta 1.15 0.99
Sharpe Ratio 0.77 0.4
Treynor Ratio 10.55 5.12

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

The Vanguard FTSE All-World ex-US Index Fund ETF Shares (VEU) has a Beta of 0.99 with a Standard Deviation of 15.08 and a Sharpe Ratio of 0.4. Its Mean Return is 0.56 while VEU’s R-squared is 98.44. Furthermore, the fund has a Treynor Ratio of 5.12 and a Alpha of 0.28.

IJH’s Mean Return is 0.57 points higher than that of VEU and its R-squared is 12.05 points lower. With a Standard Deviation of 16.8, IJH is slightly more volatile than VEU. The Alpha and Beta of IJH are 4.29 points lower and 0.16 points higher than VEU’s Alpha and Beta.

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Performance

Annual Returns

IJH vs. VEU - Annual Returns

Year IJH VEU
2020 13.61% 11.39%
2019 26.14% 21.63%
2018 -11.14% -13.97%
2017 16.19% 27.27%
2016 20.63% 4.77%
2015 -2.23% -4.67%
2014 9.64% -4.05%
2013 33.4% 14.5%
2012 17.76% 18.55%
2011 -1.89% -14.25%
2010 26.38% 11.85%

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 2017 was the strongest year for VEU, returning 27.27% on an annual basis. The poorest year for VEU in the last ten years was 2011, with a yield of -14.25%. Most years the Vanguard FTSE All-World ex-US Index Fund ETF Shares has given investors modest returns, such as in 2016, 2020, and 2010, when gains were 4.77%, 11.39%, and 11.85% respectively.

Portfolio Growth

IJH vs. VEU - Portfolio Growth

Fund Initial Balance Final Balance CAGR
IJH $10,000 $37,266 13.50%
VEU $10,000 $18,507 6.64%

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 VEU, the end total would have been $18,507. This equates to a $8,507 profit over 11 years and a compound annual growth rate (CAGR) of 6.64%.

IJH’s CAGR is 6.86 percentage points higher than that of VEU and as a result, would have yielded $18,759 more on a $10,000 investment. Thus, IJH outperformed VEU by 6.86% annually.


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