The iShares Core S&P Mid-Cap ETF (IJH) and the Vanguard Mid-Cap Index Fund ETF Shares (VO) are both among the Top 100 ETFs. IJH is a iShares Mid-Cap Blend fund and VO is a Vanguard Mid-Cap Blend fund. So, what’s the difference between IJH and VO? And which fund is better?
The expense ratio of IJH is 0.01 percentage points higher than VO’s (0.05% vs. 0.04%). IJH also has a higher exposure to the industrials sector and a higher standard deviation. Overall, IJH has provided lower returns than VO over the past ten years.
In this article, we’ll compare IJH vs. VO. We’ll look at industry exposure and performance, as well as at their annual returns and risk metrics. Moreover, I’ll also discuss IJH’s and VO’s holdings, portfolio growth, and fund composition and examine how these affect their overall returns.
Summary
| IJH | VO | |
| Name | iShares Core S&P Mid-Cap ETF | Vanguard Mid-Cap Index Fund ETF Shares |
| Category | Mid-Cap Blend | Mid-Cap Blend |
| Issuer | iShares | Vanguard |
| AUM | 63.4B | 154.08B |
| Avg. Return | 13.50% | 14.34% |
| Div. Yield | 1.07% | 1.23% |
| Expense Ratio | 0.05% | 0.04% |
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 Mid-Cap Index Fund ETF Shares (VO) is a Mid-Cap Blend fund that is issued by Vanguard. It currently has 154.08B total assets under management and has yielded an average annual return of 14.34% over the past 10 years. The fund has a dividend yield of 1.23% with an expense ratio of 0.04%.
IJH’s dividend yield is 0.16% lower than that of VO (1.07% vs. 1.23%). Also, IJH yielded on average 0.84% less per year over the past decade (13.50% vs. 14.34%). The expense ratio of IJH is 0.01 percentage points higher than VO’s (0.05% vs. 0.04%).
Fund Composition
Industry Exposure
| IJH | VO | |
| Technology | 14.81% | 22.01% |
| Industrials | 18.09% | 11.92% |
| Energy | 2.5% | 3.82% |
| Communication Services | 1.57% | 5.61% |
| Utilities | 2.9% | 5.12% |
| Healthcare | 10.89% | 13.03% |
| Consumer Defensive | 4.02% | 3.25% |
| Real Estate | 10.04% | 8.67% |
| Financial Services | 14.85% | 11.08% |
| Consumer Cyclical | 14.91% | 12.12% |
| Basic Materials | 5.42% | 3.36% |
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 Mid-Cap Index Fund ETF Shares (VO) has the most exposure to the Technology sector at 22.01%. This is followed by Healthcare and Consumer Cyclical at 13.03% and 12.12% respectively. Basic Materials (3.36%), Energy (3.82%), and Utilities (5.12%) only make up 12.30% of the fund’s total assets.
VO’s mid-section with moderate exposure is comprised of Communication Services, Real Estate, Financial Services, Industrials, and Consumer Cyclical stocks at 5.61%, 8.67%, 11.08%, 11.92%, and 12.12%.
IJH is 6.17% more exposed to the Industrials sector than VO (18.09% vs 11.92%). IJH’s exposure to Consumer Cyclical and Financial Services stocks is 2.79% higher and 3.77% higher respectively (14.91% vs. 12.12% and 14.85% vs. 11.08%). In total, Energy, Utilities, and Consumer Defensive also make up 2.77% less of the fund’s holdings compared to VO (9.42% vs. 12.19%).
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%.
| VO Holdings | Weight |
| IDEXX Laboratories Inc | 0.78% |
| DocuSign Inc | 0.75% |
| Marvell Technology Inc | 0.68% |
| IQVIA Holdings Inc | 0.68% |
| Chipotle Mexican Grill Inc | 0.63% |
| Veeva Systems Inc Class A | 0.62% |
| Digital Realty Trust Inc | 0.62% |
| Centene Corp | 0.62% |
| Aptiv PLC | 0.62% |
| Carrier Global Corp Ordinary Shares | 0.61% |
VO’s Top Holdings are IDEXX Laboratories Inc, DocuSign Inc, Marvell Technology Inc, IQVIA Holdings Inc, and Chipotle Mexican Grill Inc at 0.78%, 0.75%, 0.68%, 0.68%, and 0.63%.
Veeva Systems Inc Class A (0.62%), Digital Realty Trust Inc (0.62%), and Centene Corp (0.62%) have a slightly smaller but still significant weight. Aptiv PLC and Carrier Global Corp Ordinary Shares are also represented in the VO’s holdings at 0.62% and 0.61%.
Risk Analysis
| IJH | VO | |
| Mean Return | 1.13 | 1.14 |
| R-squared | 86.39 | 92.22 |
| Std. Deviation | 16.8 | 15.65 |
| Alpha | -4.01 | -2.71 |
| Beta | 1.15 | 1.11 |
| Sharpe Ratio | 0.77 | 0.83 |
| Treynor Ratio | 10.55 | 11.32 |
The iShares Core S&P Mid-Cap ETF (IJH) has a Mean Return of 1.13 with a Sharpe Ratio of 0.77 and a Treynor Ratio of 10.55. Its Alpha is -4.01 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 Mid-Cap Index Fund ETF Shares (VO) has a Mean Return of 1.14 with a Beta of 1.11 and a Standard Deviation of 15.65. Its R-squared is 92.22 while VO’s Treynor Ratio is 11.32. Furthermore, the fund has a Alpha of -2.71 and a Sharpe Ratio of 0.83.
IJH’s Mean Return is 0.01 points lower than that of VO and its R-squared is 5.83 points lower. With a Standard Deviation of 16.8, IJH is slightly more volatile than VO. The Alpha and Beta of IJH are 1.30 points lower and 0.04 points higher than VO’s Alpha and Beta.
Performance
Annual Returns
| Year | IJH | VO |
| 2020 | 13.61% | 18.22% |
| 2019 | 26.14% | 31.04% |
| 2018 | -11.14% | -9.21% |
| 2017 | 16.19% | 19.25% |
| 2016 | 20.63% | 11.23% |
| 2015 | -2.23% | -1.34% |
| 2014 | 9.64% | 13.76% |
| 2013 | 33.4% | 35.15% |
| 2012 | 17.76% | 15.98% |
| 2011 | -1.89% | -1.96% |
| 2010 | 26.38% | 25.57% |
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 VO, returning 35.15% on an annual basis. The poorest year for VO in the last ten years was 2018, with a yield of -9.21%. Most years the Vanguard Mid-Cap Index Fund ETF Shares has given investors modest returns, such as in 2014, 2012, and 2020, when gains were 13.76%, 15.98%, and 18.22% respectively.
Portfolio Growth
| Fund | Initial Balance | Final Balance | CAGR |
| IJH | $10,000 | $37,266 | 13.50% |
| VO | $10,000 | $40,404 | 14.34% |
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 VO, the end total would have been $40,404. This equates to a $30,404 profit over 11 years and a compound annual growth rate (CAGR) of 14.34%.
IJH’s CAGR is 0.84 percentage points lower than that of VO and as a result, would have yielded $3,138 less on a $10,000 investment. Thus, IJH performed worse than VO by 0.84% annually.
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