The iShares Core S&P Mid-Cap ETF (IJH) and the Technology Select Sector SPDR Fund (XLK) are both among the Top 100 ETFs. IJH is a iShares Mid-Cap Blend fund and XLK is a SPDR State Street Global Advisors Technology fund. So, what’s the difference between IJH and XLK? And which fund is better?
The expense ratio of IJH is 0.07 percentage points lower than XLK’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 XLK over the past ten years.
In this article, we’ll compare IJH vs. XLK. We’ll look at industry exposure and risk metrics, as well as at their performance and holdings. Moreover, I’ll also discuss IJH’s and XLK’s portfolio growth, fund composition, and annual returns and examine how these affect their overall returns.
|Name||iShares Core S&P Mid-Cap ETF||Technology Select Sector SPDR Fund|
|Issuer||iShares||SPDR State Street Global Advisors|
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 Technology Select Sector SPDR Fund (XLK) is a Technology fund that is issued by SPDR State Street Global Advisors. It currently has 42.3B total assets under management and has yielded an average annual return of 20.02% over the past 10 years. The fund has a dividend yield of 0.73% with an expense ratio of 0.12%.
IJH’s dividend yield is 0.34% higher than that of XLK (1.07% vs. 0.73%). Also, IJH yielded on average 6.53% less per year over the past decade (13.50% vs. 20.02%). The expense ratio of IJH is 0.07 percentage points lower than XLK’s (0.05% vs. 0.12%).
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 Technology Select Sector SPDR Fund (XLK) has the most exposure to the Technology sector at 87.54%. This is followed by Financial Services and Industrials at 10.71% and 1.75% respectively. Consumer Cyclical (0.0%), Real Estate (0.0%), and Consumer Defensive (0.0%) only make up 0.00% of the fund’s total assets.
XLK’s mid-section with moderate exposure is comprised of Healthcare, Utilities, Communication Services, Energy, and Industrials stocks at 0.0%, 0.0%, 0.0%, 0.0%, and 1.75%.
IJH is 16.34% more exposed to the Industrials sector than XLK (18.09% vs 1.75%). IJH’s exposure to Consumer Cyclical and Financial Services stocks is 14.91% higher and 4.14% higher respectively (14.91% vs. 0.0% and 14.85% vs. 10.71%). In total, Energy, Utilities, and Consumer Defensive also make up 9.42% more of the fund’s holdings compared to XLK (9.42% vs. 0.00%).
|Molina Healthcare Inc||0.68%|
|Fair Isaac Corp||0.64%|
|Camden Property Trust||0.62%|
|XPO Logistics Inc||0.6%|
|SolarEdge Technologies Inc||0.57%|
|FactSet Research Systems Inc||0.57%|
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%.
|Visa Inc Class A||3.95%|
|PayPal Holdings Inc||3.42%|
|Mastercard Inc A||3.19%|
|Cisco Systems Inc||2.23%|
XLK’s Top Holdings are Apple Inc, Microsoft Corp, NVIDIA Corp, Visa Inc Class A, and PayPal Holdings Inc at 21.45%, 20.37%, 4.98%, 3.95%, and 3.42%.
Mastercard Inc A (3.19%), Adobe Inc (2.8%), and Salesforce.com Inc (2.26%) have a slightly smaller but still significant weight. Intel Corp and Cisco Systems Inc are also represented in the XLK’s holdings at 2.26% and 2.23%.
The iShares Core S&P Mid-Cap ETF (IJH) has a R-squared of 86.39 with a Sharpe Ratio of 0.77 and a Alpha of -4.01. Its Beta is 1.15 while IJH’s Treynor Ratio is 10.55. Furthermore, the fund has a Standard Deviation of 16.8 and a Mean Return of 1.13.
The Technology Select Sector SPDR Fund (XLK) has a Beta of 0.95 with a Mean Return of 1.7 and a Treynor Ratio of 21.44. Its Standard Deviation is 15.58 while XLK’s Sharpe Ratio is 1.27. Furthermore, the fund has a R-squared of 73.56 and a Alpha of 10.43.
IJH’s Mean Return is 0.57 points lower than that of XLK and its R-squared is 12.83 points higher. With a Standard Deviation of 16.8, IJH is slightly more volatile than XLK. The Alpha and Beta of IJH are 14.44 points lower and 0.20 points higher than XLK’s Alpha and Beta.
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 XLK, returning 49.97% on an annual basis. The poorest year for XLK in the last ten years was 2018, with a yield of -1.56%. Most years the Technology Select Sector SPDR Fund has given investors modest returns, such as in 2016, 2012, and 2014, when gains were 14.81%, 15.47%, and 17.75% respectively.
|Fund||Initial Balance||Final Balance||CAGR|
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 XLK, the end total would have been $67,790. This equates to a $57,790 profit over 11 years and a compound annual growth rate (CAGR) of 20.02%.
IJH’s CAGR is 6.53 percentage points lower than that of XLK and as a result, would have yielded $30,524 less on a $10,000 investment. Thus, IJH performed worse than XLK by 6.53% annually.
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