The iShares Core S&P Mid-Cap ETF (IJH) and the Vanguard Health Care Index Fund ETF Shares (VHT) are both among the Top 100 ETFs. IJH is a iShares Mid-Cap Blend fund and VHT is a Vanguard Health fund. So, what’s the difference between IJH and VHT? And which fund is better?
The expense ratio of IJH is 0.05 percentage points lower than VHT’s (0.05% vs. 0.1%). IJH also has a higher exposure to the industrials sector and a higher standard deviation. Overall, IJH has provided lower returns than VHT over the past ten years.
In this article, we’ll compare IJH vs. VHT. We’ll look at holdings and industry exposure, as well as at their risk metrics and fund composition. Moreover, I’ll also discuss IJH’s and VHT’s annual returns, portfolio growth, and performance and examine how these affect their overall returns.
|Name||iShares Core S&P Mid-Cap ETF||Vanguard Health Care Index Fund ETF Shares|
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 Health Care Index Fund ETF Shares (VHT) is a Health fund that is issued by Vanguard. It currently has 17.94B total assets under management and has yielded an average annual return of 16.04% over the past 10 years. The fund has a dividend yield of 1.15% with an expense ratio of 0.1%.
IJH’s dividend yield is 0.08% lower than that of VHT (1.07% vs. 1.15%). Also, IJH yielded on average 2.54% less per year over the past decade (13.50% vs. 16.04%). The expense ratio of IJH is 0.05 percentage points lower than VHT’s (0.05% vs. 0.1%).
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 Health Care Index Fund ETF Shares (VHT) has the most exposure to the Healthcare sector at 99.57%. This is followed by Basic Materials and Technology at 0.31% and 0.05% respectively. Real Estate (0.0%), Consumer Defensive (0.0%), and Utilities (0.0%) only make up 0.00% of the fund’s total assets.
VHT’s mid-section with moderate exposure is comprised of Communication Services, Energy, Financial Services, Industrials, and Technology stocks at 0.0%, 0.0%, 0.02%, 0.05%, and 0.05%.
IJH is 18.04% more exposed to the Industrials sector than VHT (18.09% vs 0.05%). IJH’s exposure to Consumer Cyclical and Financial Services stocks is 14.91% higher and 14.83% higher respectively (14.91% vs. 0.0% and 14.85% vs. 0.02%). In total, Energy, Utilities, and Consumer Defensive also make up 9.42% more of the fund’s holdings compared to VHT (9.42% vs. 0.00%).
|Molina Healthcare Inc||0.68%|
|Fair Isaac Corp||0.64%|
|Camden Property Trust||0.62%|
|XPO Logistics Inc||0.6%|
|SolarEdge Technologies Inc||0.57%|
|FactSet Research Systems Inc||0.57%|
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%.
|Johnson & Johnson||7.34%|
|UnitedHealth Group Inc||6.44%|
|Thermo Fisher Scientific Inc||3.37%|
|Merck & Co Inc||3.33%|
|Eli Lilly and Co||3.17%|
VHT’s Top Holdings are Johnson & Johnson, UnitedHealth Group Inc, Pfizer Inc, Abbott Laboratories, and Thermo Fisher Scientific Inc at 7.34%, 6.44%, 3.7%, 3.48%, and 3.37%.
AbbVie Inc (3.37%), Merck & Co Inc (3.33%), and Eli Lilly and Co (3.17%) have a slightly smaller but still significant weight. Danaher Corp and Medtronic PLC are also represented in the VHT’s holdings at 2.91% and 2.83%.
The iShares Core S&P Mid-Cap ETF (IJH) has a Sharpe Ratio of 0.77 with a Standard Deviation of 16.8 and a R-squared of 86.39. Its Beta is 1.15 while IJH’s Mean Return is 1.13. Furthermore, the fund has a Alpha of -4.01 and a Treynor Ratio of 10.55.
The Vanguard Health Care Index Fund ETF Shares (VHT) has a Beta of 0.75 with a Mean Return of 1.33 and a Treynor Ratio of 20.74. Its Alpha is 7.99 while VHT’s Sharpe Ratio is 1.13. Furthermore, the fund has a Standard Deviation of 13.58 and a R-squared of 59.86.
IJH’s Mean Return is 0.20 points lower than that of VHT and its R-squared is 26.53 points higher. With a Standard Deviation of 16.8, IJH is slightly more volatile than VHT. The Alpha and Beta of IJH are 12.00 points lower and 0.40 points higher than VHT’s Alpha and Beta.
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 VHT, returning 42.67% on an annual basis. The poorest year for VHT in the last ten years was 2016, with a yield of -3.33%. Most years the Vanguard Health Care Index Fund ETF Shares has given investors modest returns, such as in 2011, 2020, and 2012, when gains were 10.57%, 18.21%, and 19.1% respectively.
|Fund||Initial Balance||Final Balance||CAGR|
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 VHT, the end total would have been $48,464. This equates to a $38,464 profit over 11 years and a compound annual growth rate (CAGR) of 16.04%.
IJH’s CAGR is 2.54 percentage points lower than that of VHT and as a result, would have yielded $11,198 less on a $10,000 investment. Thus, IJH performed worse than VHT by 2.54% annually.
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