The iShares Core S&P Mid-Cap ETF (IJH) and the Vanguard Mortgage-Backed Securities Index Fund ETF Shares (VMBS) are both among the Top 100 ETFs. IJH is a iShares Mid-Cap Blend fund and VMBS is a Vanguard Intermediate Government fund. So, what’s the difference between IJH and VMBS? And which fund is better?
IJH and VMBS have the same expense ratio: 0.05%. IJH also has a high exposure to the industrials sector while VMBS is mostly comprised of AAA bonds. Overall, IJH has provided higher returns than VMBS over the past ten years.
In this article, we’ll compare IJH vs. VMBS. We’ll look at industry exposure and annual returns, as well as at their risk metrics and portfolio growth. Moreover, I’ll also discuss IJH’s and VMBS’s holdings, fund composition, and performance and examine how these affect their overall returns.
|Name||iShares Core S&P Mid-Cap ETF||Vanguard Mortgage-Backed Securities Index Fund ETF Shares|
|Category||Mid-Cap Blend||Intermediate Government|
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 Mortgage-Backed Securities Index Fund ETF Shares (VMBS) is a Intermediate Government fund that is issued by Vanguard. It currently has 16.61B total assets under management and has yielded an average annual return of 2.89% over the past 10 years. The fund has a dividend yield of 1.23% with an expense ratio of 0.05%.
IJH’s dividend yield is 0.16% lower than that of VMBS (1.07% vs. 1.23%). Also, IJH yielded on average 10.61% more per year over the past decade (13.50% vs. 2.89%). IJH and VMBS have the same expense ratio: 0.05%.
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|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%.
|VMBS Bond Sectors||Weight|
VMBS’s Top Bond Sectors are ratings of AAA, Below B, B, BB, and BBB at 100.01%, 0.0%, 0.0%, 0.0%, and 0.0%. The fund is less weighted towards A (0.0%), AA (0.0%), and US Government (0.0%) rated bonds.
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The iShares Core S&P Mid-Cap ETF (IJH) has a Alpha of -4.01 with a Mean Return of 1.13 and a Sharpe Ratio of 0.77. Its Treynor Ratio is 10.55 while IJH’s R-squared is 86.39. Furthermore, the fund has a Beta of 1.15 and a Standard Deviation of 16.8.
The Vanguard Mortgage-Backed Securities Index Fund ETF Shares (VMBS) has a Beta of 0.54 with a R-squared of 65.78 and a Treynor Ratio of 3.47. Its Mean Return is 0.21 while VMBS’s Alpha is 0.37. Furthermore, the fund has a Standard Deviation of 2.02 and a Sharpe Ratio of 0.94.
IJH’s Mean Return is 0.92 points higher than that of VMBS and its R-squared is 20.61 points higher. With a Standard Deviation of 16.8, IJH is slightly more volatile than VMBS. The Alpha and Beta of IJH are 4.38 points lower and 0.61 points higher than VMBS’s Alpha and Beta.
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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 VMBS, returning 6.17% on an annual basis. The poorest year for VMBS in the last ten years was 2013, with a yield of -1.28%. Most years the Vanguard Mortgage-Backed Securities Index Fund ETF Shares has given investors modest returns, such as in 2017, 2012, and 2020, when gains were 2.37%, 2.47%, and 3.77% respectively.
|Fund||Initial Balance||Final Balance||CAGR|
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 VMBS, the end total would have been $13,265. This equates to a $3,265 profit over 10 years and a compound annual growth rate (CAGR) of 2.89%.
IJH’s CAGR is 10.61 percentage points higher than that of VMBS and as a result, would have yielded $16,222 more on a $10,000 investment. Thus, IJH outperformed VMBS by 10.61% annually.
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