The iShares Core S&P Mid-Cap ETF (IJH) and the Industrial Select Sector SPDR Fund (XLI) are both among the Top 100 ETFs. IJH is a iShares Mid-Cap Blend fund and XLI is a SPDR State Street Global Advisors Industrials fund. So, what’s the difference between IJH and XLI? And which fund is better?
The expense ratio of IJH is 0.07 percentage points lower than XLI’s (0.05% vs. 0.12%). IJH also has a lower exposure to the industrials sector and a lower standard deviation. Overall, IJH has provided lower returns than XLI over the past ten years.
In this article, we’ll compare IJH vs. XLI. We’ll look at performance and annual returns, as well as at their risk metrics and portfolio growth. Moreover, I’ll also discuss IJH’s and XLI’s industry exposure, holdings, and fund composition and examine how these affect their overall returns.
Summary
| IJH | XLI | |
| Name | iShares Core S&P Mid-Cap ETF | Industrial Select Sector SPDR Fund |
| Category | Mid-Cap Blend | Industrials |
| Issuer | iShares | SPDR State Street Global Advisors |
| AUM | 63.4B | 19.33B |
| Avg. Return | 13.50% | 14.44% |
| Div. Yield | 1.07% | 1.25% |
| 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 Industrial Select Sector SPDR Fund (XLI) is a Industrials fund that is issued by SPDR State Street Global Advisors. It currently has 19.33B total assets under management and has yielded an average annual return of 14.44% over the past 10 years. The fund has a dividend yield of 1.25% with an expense ratio of 0.12%.
IJH’s dividend yield is 0.18% lower than that of XLI (1.07% vs. 1.25%). Also, IJH yielded on average 0.94% less per year over the past decade (13.50% vs. 14.44%). The expense ratio of IJH is 0.07 percentage points lower than XLI’s (0.05% vs. 0.12%).
Fund Composition
Industry Exposure
| IJH | XLI | |
| Technology | 14.81% | 1.82% |
| Industrials | 18.09% | 97.49% |
| Energy | 2.5% | 0.0% |
| 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% | 0.69% |
| 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 Industrial Select Sector SPDR Fund (XLI) has the most exposure to the Industrials sector at 97.49%. This is followed by Technology and Consumer Cyclical at 1.82% and 0.69% respectively. Financial Services (0.0%), Real Estate (0.0%), and Consumer Defensive (0.0%) only make up 0.00% of the fund’s total assets.
XLI’s mid-section with moderate exposure is comprised of Healthcare, Utilities, Communication Services, Energy, and Consumer Cyclical stocks at 0.0%, 0.0%, 0.0%, 0.0%, and 0.69%.
IJH is 79.40% less exposed to the Industrials sector than XLI (18.09% vs 97.49%). IJH’s exposure to Consumer Cyclical and Financial Services stocks is 14.22% higher and 14.85% higher respectively (14.91% vs. 0.69% 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 XLI (9.42% vs. 0.00%).
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%.
| XLI Holdings | Weight |
| Honeywell International Inc | 4.9% |
| United Parcel Service Inc Class B | 4.84% |
| Union Pacific Corp | 4.7% |
| Boeing Co | 4.24% |
| Raytheon Technologies Corp | 4.16% |
| Caterpillar Inc | 3.84% |
| General Electric Co | 3.8% |
| 3M Co | 3.7% |
| Deere & Co | 3.54% |
| Lockheed Martin Corp | 2.98% |
XLI’s Top Holdings are Honeywell International Inc, United Parcel Service Inc Class B, Union Pacific Corp, Boeing Co, and Raytheon Technologies Corp at 4.9%, 4.84%, 4.7%, 4.24%, and 4.16%.
Caterpillar Inc (3.84%), General Electric Co (3.8%), and 3M Co (3.7%) have a slightly smaller but still significant weight. Deere & Co and Lockheed Martin Corp are also represented in the XLI’s holdings at 3.54% and 2.98%.
Risk Analysis
| IJH | XLI | |
| Mean Return | 1.13 | 1.14 |
| R-squared | 86.39 | 78.97 |
| Std. Deviation | 16.8 | 17.13 |
| Alpha | -4.01 | 2.38 |
| Beta | 1.15 | 1.08 |
| Sharpe Ratio | 0.77 | 0.76 |
| Treynor Ratio | 10.55 | 11.34 |
The iShares Core S&P Mid-Cap ETF (IJH) has a Alpha of -4.01 with a Standard Deviation of 16.8 and a Treynor Ratio of 10.55. Its Sharpe Ratio is 0.77 while IJH’s Beta is 1.15. Furthermore, the fund has a R-squared of 86.39 and a Mean Return of 1.13.
The Industrial Select Sector SPDR Fund (XLI) has a Beta of 1.08 with a Sharpe Ratio of 0.76 and a Alpha of 2.38. Its Standard Deviation is 17.13 while XLI’s Mean Return is 1.14. Furthermore, the fund has a Treynor Ratio of 11.34 and a R-squared of 78.97.
IJH’s Mean Return is 0.01 points lower than that of XLI and its R-squared is 7.42 points higher. With a Standard Deviation of 16.8, IJH is slightly less volatile than XLI. The Alpha and Beta of IJH are 6.39 points lower and 0.07 points higher than XLI’s Alpha and Beta.
Performance
Annual Returns
| Year | IJH | XLI |
| 2020 | 13.61% | 11.0% |
| 2019 | 26.14% | 29.11% |
| 2018 | -11.14% | -13.1% |
| 2017 | 16.19% | 23.85% |
| 2016 | 20.63% | 19.93% |
| 2015 | -2.23% | -4.27% |
| 2014 | 9.64% | 10.44% |
| 2013 | 33.4% | 40.44% |
| 2012 | 17.76% | 14.86% |
| 2011 | -1.89% | -1.01% |
| 2010 | 26.38% | 27.62% |
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 XLI, returning 40.44% on an annual basis. The poorest year for XLI in the last ten years was 2018, with a yield of -13.1%. Most years the Industrial Select Sector SPDR Fund has given investors modest returns, such as in 2020, 2012, and 2016, when gains were 11.0%, 14.86%, and 19.93% respectively.
Portfolio Growth
| Fund | Initial Balance | Final Balance | CAGR |
| IJH | $10,000 | $37,266 | 13.50% |
| XLI | $10,000 | $39,853 | 14.44% |
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 XLI, the end total would have been $39,853. This equates to a $29,853 profit over 11 years and a compound annual growth rate (CAGR) of 14.44%.
IJH’s CAGR is 0.94 percentage points lower than that of XLI and as a result, would have yielded $2,587 less on a $10,000 investment. Thus, IJH performed worse than XLI by 0.94% annually.
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