IJH vs. XLE: What’s The Difference?

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

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

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

Summary

IJH XLE
Name iShares Core S&P Mid-Cap ETF Energy Select Sector SPDR Fund
Category Mid-Cap Blend Equity Energy
Issuer iShares SPDR State Street Global Advisors
AUM 63.4B 25.55B
Avg. Return 13.50% 1.28%
Div. Yield 1.07% 3.92%
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 Energy Select Sector SPDR Fund (XLE) is a Equity Energy fund that is issued by SPDR State Street Global Advisors. It currently has 25.55B total assets under management and has yielded an average annual return of 1.28% over the past 10 years. The fund has a dividend yield of 3.92% with an expense ratio of 0.12%.

IJH’s dividend yield is 2.85% lower than that of XLE (1.07% vs. 3.92%). Also, IJH yielded on average 12.22% more per year over the past decade (13.50% vs. 1.28%). The expense ratio of IJH is 0.07 percentage points lower than XLE’s (0.05% vs. 0.12%).

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Fund Composition

Industry Exposure

IJH vs. XLE - Industry Exposure

IJH XLE
Technology 14.81% 0.0%
Industrials 18.09% 0.0%
Energy 2.5% 100.0%
Communication Services 1.57% 0.0%
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 Energy Select Sector SPDR Fund (XLE) has the most exposure to the Energy 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.

XLE’s mid-section with moderate exposure is comprised of Consumer Defensive, Healthcare, Utilities, Communication Services, 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 XLE (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 90.58% less of the fund’s holdings compared to XLE (9.42% vs. 100.00%).

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%.

XLE - Holdings

XLE Holdings Weight
Exxon Mobil Corp 23.7%
Chevron Corp 20.03%
ConocoPhillips 4.64%
EOG Resources Inc 4.46%
Schlumberger Ltd 4.43%
Marathon Petroleum Corp 4.17%
Pioneer Natural Resources Co 4.08%
Phillips 66 4.07%
Kinder Morgan Inc Class P 3.85%
Williams Companies Inc 3.5%

XLE’s Top Holdings are Exxon Mobil Corp, Chevron Corp, ConocoPhillips, EOG Resources Inc, and Schlumberger Ltd at 23.7%, 20.03%, 4.64%, 4.46%, and 4.43%.

Marathon Petroleum Corp (4.17%), Pioneer Natural Resources Co (4.08%), and Phillips 66 (4.07%) have a slightly smaller but still significant weight. Kinder Morgan Inc Class P and Williams Companies Inc are also represented in the XLE’s holdings at 3.85% and 3.5%.

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Risk Analysis

IJH XLE
Mean Return 1.13 0.32
R-squared 86.39 61.84
Std. Deviation 16.8 27.52
Alpha -4.01 -11.98
Beta 1.15 1.54
Sharpe Ratio 0.77 0.12
Treynor Ratio 10.55 -0.4

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

The Energy Select Sector SPDR Fund (XLE) has a Beta of 1.54 with a Standard Deviation of 27.52 and a Sharpe Ratio of 0.12. Its Treynor Ratio is -0.4 while XLE’s R-squared is 61.84. Furthermore, the fund has a Alpha of -11.98 and a Mean Return of 0.32.

IJH’s Mean Return is 0.81 points higher than that of XLE and its R-squared is 24.55 points higher. With a Standard Deviation of 16.8, IJH is slightly less volatile than XLE. The Alpha and Beta of IJH are 7.97 points higher and 0.39 points lower than XLE’s Alpha and Beta.

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Performance

Annual Returns

IJH vs. XLE - Annual Returns

Year IJH XLE
2020 13.61% -32.56%
2019 26.14% 11.87%
2018 -11.14% -18.1%
2017 16.19% -1.01%
2016 20.63% 27.95%
2015 -2.23% -21.47%
2014 9.64% -8.61%
2013 33.4% 26.16%
2012 17.76% 5.17%
2011 -1.89% 2.98%
2010 26.38% 21.7%

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 2016 was the strongest year for XLE, returning 27.95% on an annual basis. The poorest year for XLE in the last ten years was 2020, with a yield of -32.56%. Most years the Energy Select Sector SPDR Fund has given investors modest returns, such as in 2017, 2011, and 2012, when gains were -1.01%, 2.98%, and 5.17% respectively.

Portfolio Growth

IJH vs. XLE - Portfolio Growth

Fund Initial Balance Final Balance CAGR
IJH $10,000 $37,266 13.50%
XLE $10,000 $9,339 1.28%

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 XLE, the end total would have been $9,339. This equates to a $-661 profit over 11 years and a compound annual growth rate (CAGR) of 1.28%.

IJH’s CAGR is 12.22 percentage points higher than that of XLE and as a result, would have yielded $27,927 more on a $10,000 investment. Thus, IJH outperformed XLE by 12.22% annually.


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