IJH vs. VYM: What’s The Difference?

The iShares Core S&P Mid-Cap ETF (IJH) and the Vanguard High Dividend Yield Index Fund ETF Shares (VYM) are both among the Top 100 ETFs. IJH is a iShares Mid-Cap Blend fund and VYM is a Vanguard Large Value fund. So, what’s the difference between IJH and VYM? And which fund is better?

The expense ratio of IJH is 0.01 percentage points lower than VYM’s (0.05% vs. 0.06%). IJH also has a higher exposure to the industrials sector and a higher standard deviation. Overall, IJH has provided higher returns than VYM over the past ten years.

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

Summary

IJH VYM
Name iShares Core S&P Mid-Cap ETF Vanguard High Dividend Yield Index Fund ETF Shares
Category Mid-Cap Blend Large Value
Issuer iShares Vanguard
AUM 63.4B 48.5B
Avg. Return 13.50% 12.20%
Div. Yield 1.07% 2.79%
Expense Ratio 0.05% 0.06%

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 High Dividend Yield Index Fund ETF Shares (VYM) is a Large Value fund that is issued by Vanguard. It currently has 48.5B total assets under management and has yielded an average annual return of 12.20% over the past 10 years. The fund has a dividend yield of 2.79% with an expense ratio of 0.06%.

IJH’s dividend yield is 1.72% lower than that of VYM (1.07% vs. 2.79%). Also, IJH yielded on average 1.30% more per year over the past decade (13.50% vs. 12.20%). The expense ratio of IJH is 0.01 percentage points lower than VYM’s (0.05% vs. 0.06%).

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Fund Composition

Industry Exposure

IJH vs. VYM - Industry Exposure

IJH VYM
Technology 14.81% 9.77%
Industrials 18.09% 10.14%
Energy 2.5% 7.12%
Communication Services 1.57% 5.91%
Utilities 2.9% 7.27%
Healthcare 10.89% 13.61%
Consumer Defensive 4.02% 14.13%
Real Estate 10.04% 0.02%
Financial Services 14.85% 22.05%
Consumer Cyclical 14.91% 5.57%
Basic Materials 5.42% 4.41%

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 High Dividend Yield Index Fund ETF Shares (VYM) has the most exposure to the Financial Services sector at 22.05%. This is followed by Consumer Defensive and Healthcare at 14.13% and 13.61% respectively. Basic Materials (4.41%), Consumer Cyclical (5.57%), and Communication Services (5.91%) only make up 15.89% of the fund’s total assets.

VYM’s mid-section with moderate exposure is comprised of Energy, Utilities, Technology, Industrials, and Healthcare stocks at 7.12%, 7.27%, 9.77%, 10.14%, and 13.61%.

IJH is 7.95% more exposed to the Industrials sector than VYM (18.09% vs 10.14%). IJH’s exposure to Consumer Cyclical and Financial Services stocks is 9.34% higher and 7.20% lower respectively (14.91% vs. 5.57% and 14.85% vs. 22.05%). In total, Energy, Utilities, and Consumer Defensive also make up 19.10% less of the fund’s holdings compared to VYM (9.42% vs. 28.52%).

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%.

VYM - Holdings

VYM Holdings Weight
JPMorgan Chase & Co 3.53%
Johnson & Johnson 3.28%
The Home Depot Inc 2.59%
Procter & Gamble Co 2.48%
Bank of America Corp 2.35%
Exxon Mobil Corp 2.02%
Comcast Corp Class A 1.96%
Verizon Communications Inc 1.75%
Intel Corp 1.71%
Cisco Systems Inc 1.69%

VYM’s Top Holdings are JPMorgan Chase & Co, Johnson & Johnson, The Home Depot Inc, Procter & Gamble Co, and Bank of America Corp at 3.53%, 3.28%, 2.59%, 2.48%, and 2.35%.

Exxon Mobil Corp (2.02%), Comcast Corp Class A (1.96%), and Verizon Communications Inc (1.75%) have a slightly smaller but still significant weight. Intel Corp and Cisco Systems Inc are also represented in the VYM’s holdings at 1.71% and 1.69%.

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Risk Analysis

IJH VYM
Mean Return 1.13 1.04
R-squared 86.39 88.88
Std. Deviation 16.8 12.69
Alpha -4.01 -0.7
Beta 1.15 0.88
Sharpe Ratio 0.77 0.93
Treynor Ratio 10.55 13.24

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

The Vanguard High Dividend Yield Index Fund ETF Shares (VYM) has a Beta of 0.88 with a Alpha of -0.7 and a Mean Return of 1.04. Its Standard Deviation is 12.69 while VYM’s Sharpe Ratio is 0.93. Furthermore, the fund has a Treynor Ratio of 13.24 and a R-squared of 88.88.

IJH’s Mean Return is 0.09 points higher than that of VYM and its R-squared is 2.49 points lower. With a Standard Deviation of 16.8, IJH is slightly more volatile than VYM. The Alpha and Beta of IJH are 3.31 points lower and 0.27 points higher than VYM’s Alpha and Beta.

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Performance

Annual Returns

IJH vs. VYM - Annual Returns

Year IJH VYM
2020 13.61% 1.14%
2019 26.14% 24.2%
2018 -11.14% -5.87%
2017 16.19% 16.42%
2016 20.63% 16.87%
2015 -2.23% 0.33%
2014 9.64% 13.47%
2013 33.4% 30.26%
2012 17.76% 12.68%
2011 -1.89% 10.5%
2010 26.38% 14.17%

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 VYM, returning 30.26% on an annual basis. The poorest year for VYM in the last ten years was 2018, with a yield of -5.87%. Most years the Vanguard High Dividend Yield Index Fund ETF Shares has given investors modest returns, such as in 2012, 2014, and 2010, when gains were 12.68%, 13.47%, and 14.17% respectively.

Portfolio Growth

IJH vs. VYM - Portfolio Growth

Fund Initial Balance Final Balance CAGR
IJH $10,000 $37,266 13.50%
VYM $10,000 $33,914 12.20%

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 VYM, the end total would have been $33,914. This equates to a $23,914 profit over 11 years and a compound annual growth rate (CAGR) of 12.20%.

IJH’s CAGR is 1.30 percentage points higher than that of VYM and as a result, would have yielded $3,352 more on a $10,000 investment. Thus, IJH outperformed VYM by 1.30% annually.


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