IJH vs. XLC: What’s The Difference?

The iShares Core S&P Mid-Cap ETF (IJH) and the Communication Services Select Sector SPDR Fund (XLC) are both among the Top 100 ETFs. IJH is a iShares Mid-Cap Blend fund and XLC is a SPDR State Street Global Advisors Communications fund. So, what’s the difference between IJH and XLC? And which fund is better?

The expense ratio of IJH is 0.07 percentage points lower than XLC’s (0.05% vs. 0.12%). IJH also has a higher exposure to the industrials sector and a higher standard deviation. Overall, IJH has provided lower returns than XLC over the past ten years.

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

Summary

IJH XLC
Name iShares Core S&P Mid-Cap ETF Communication Services Select Sector SPDR Fund
Category Mid-Cap Blend Communications
Issuer iShares SPDR State Street Global Advisors
AUM 63.4B 14.09B
Avg. Return 13.50% 29.04%
Div. Yield 1.07% 0.62%
Expense Ratio 0.05% 0.12%

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 Communication Services Select Sector SPDR Fund (XLC) is a Communications fund that is issued by SPDR State Street Global Advisors. It currently has 14.09B total assets under management and has yielded an average annual return of 29.04% over the past 10 years. The fund has a dividend yield of 0.62% with an expense ratio of 0.12%.

IJH’s dividend yield is 0.45% higher than that of XLC (1.07% vs. 0.62%). Also, IJH yielded on average 15.54% less per year over the past decade (13.50% vs. 29.04%). The expense ratio of IJH is 0.07 percentage points lower than XLC’s (0.05% vs. 0.12%).

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Fund Composition

Industry Exposure

IJH vs. XLC - Industry Exposure

IJH XLC
Technology 14.81% 0.0%
Industrials 18.09% 0.0%
Energy 2.5% 0.0%
Communication Services 1.57% 100.0%
Utilities 2.9% 0.0%
Healthcare 10.89% 0.0%
Consumer Defensive 4.02% 0.0%
Real Estate 10.04% 0.0%
Financial Services 14.85% 0.0%
Consumer Cyclical 14.91% 0.0%
Basic Materials 5.42% 0.0%

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 Communication Services Select Sector SPDR Fund (XLC) has the most exposure to the Communication Services sector at 100.0%. This is followed by Technology and Industrials at 0.0% and 0.0% respectively. Consumer Cyclical (0.0%), Financial Services (0.0%), and Real Estate (0.0%) only make up 0.00% of the fund’s total assets.

XLC’s mid-section with moderate exposure is comprised of Consumer Defensive, Healthcare, Utilities, Energy, and Industrials stocks at 0.0%, 0.0%, 0.0%, 0.0%, and 0.0%.

IJH is 18.09% more exposed to the Industrials sector than XLC (18.09% vs 0.0%). IJH’s exposure to Consumer Cyclical and Financial Services stocks is 14.91% higher and 14.85% higher respectively (14.91% vs. 0.0% and 14.85% vs. 0.0%). In total, Energy, Utilities, and Consumer Defensive also make up 9.42% more of the fund’s holdings compared to XLC (9.42% vs. 0.00%).

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%.

XLC - Holdings

XLC Holdings Weight
Facebook Inc A 23.75%
Alphabet Inc A 11.49%
Alphabet Inc Class C 11.16%
Netflix Inc 4.78%
Charter Communications Inc A 4.65%
Comcast Corp Class A 4.44%
T-Mobile US Inc 4.41%
The Walt Disney Co 4.39%
AT&T Inc 4.35%
Verizon Communications Inc 4.33%

XLC’s Top Holdings are Facebook Inc A, Alphabet Inc A, Alphabet Inc Class C, Netflix Inc, and Charter Communications Inc A at 23.75%, 11.49%, 11.16%, 4.78%, and 4.65%.

Comcast Corp Class A (4.44%), T-Mobile US Inc (4.41%), and The Walt Disney Co (4.39%) have a slightly smaller but still significant weight. AT&T Inc and Verizon Communications Inc are also represented in the XLC’s holdings at 4.35% and 4.33%.

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Risk Analysis

IJH XLC
Mean Return 1.13 0
R-squared 86.39 0
Std. Deviation 16.8 0
Alpha -4.01 0
Beta 1.15 0
Sharpe Ratio 0.77 0
Treynor Ratio 10.55 0

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

The Communication Services Select Sector SPDR Fund (XLC) has a Standard Deviation of 0 with a Mean Return of 0 and a Alpha of 0. Its Beta is 0 while XLC’s Treynor Ratio is 0. Furthermore, the fund has a Sharpe Ratio of 0 and a R-squared of 0.

IJH’s Mean Return is 1.13 points higher than that of XLC and its R-squared is 86.39 points higher. With a Standard Deviation of 16.8, IJH is slightly more volatile than XLC. The Alpha and Beta of IJH are 4.01 points lower and 1.15 points higher than XLC’s Alpha and Beta.

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Performance

Annual Returns

IJH vs. XLC - Annual Returns

Year IJH XLC
2020 13.61% 26.85%
2019 26.14% 31.22%
2018 -11.14% 0.0%
2017 16.19% 0.0%
2016 20.63% 0.0%
2015 -2.23% 0.0%
2014 9.64% 0.0%
2013 33.4% 0.0%
2012 17.76% 0.0%
2011 -1.89% 0.0%
2010 26.38% 0.0%

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 XLC, returning 31.22% on an annual basis. The poorest year for XLC in the last ten years was 2018, with a yield of 0.0%. Most years the Communication Services Select Sector SPDR Fund has given investors modest returns, such as in 2014, 2013, and 2012, when gains were 0.0%, 0.0%, and 0.0% respectively.

Portfolio Growth

IJH vs. XLC - Portfolio Growth

Fund Initial Balance Final Balance CAGR
IJH $10,000 $14,330 13.50%
XLC $10,000 $16,645 29.04%

A $10,000 investment in IJH would have resulted in a final balance of $14,330. This is a profit of $4,330 over 2 years and amounts to a compound annual growth rate (CAGR) of 13.50%.

With a $10,000 investment in XLC, the end total would have been $16,645. This equates to a $6,645 profit over 2 years and a compound annual growth rate (CAGR) of 29.04%.

IJH’s CAGR is 15.54 percentage points lower than that of XLC and as a result, would have yielded $2,315 less on a $10,000 investment. Thus, IJH performed worse than XLC by 15.54% annually.


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