The iShares Core S&P Mid-Cap ETF (IJH) and the Health Care Select Sector SPDR Fund (XLV) are both among the Top 100 ETFs. IJH is a iShares Mid-Cap Blend fund and XLV is a SPDR State Street Global Advisors Health fund. So, what’s the difference between IJH and XLV? And which fund is better?
The expense ratio of IJH is 0.07 percentage points lower than XLV’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 XLV over the past ten years.
In this article, we’ll compare IJH vs. XLV. We’ll look at industry exposure and performance, as well as at their annual returns and risk metrics. Moreover, I’ll also discuss IJH’s and XLV’s holdings, fund composition, and portfolio growth and examine how these affect their overall returns.
|Name||iShares Core S&P Mid-Cap ETF||Health Care 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 Health Care Select Sector SPDR Fund (XLV) is a Health fund that is issued by SPDR State Street Global Advisors. It currently has 27.88B total assets under management and has yielded an average annual return of 15.02% over the past 10 years. The fund has a dividend yield of 1.4% with an expense ratio of 0.12%.
IJH’s dividend yield is 0.33% lower than that of XLV (1.07% vs. 1.4%). Also, IJH yielded on average 1.53% less per year over the past decade (13.50% vs. 15.02%). The expense ratio of IJH is 0.07 percentage points lower than XLV’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 Health Care Select Sector SPDR Fund (XLV) has the most exposure to the Healthcare 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.
XLV’s mid-section with moderate exposure is comprised of Consumer Defensive, Utilities, Communication Services, 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 XLV (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 XLV (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%.
|Johnson & Johnson||9.19%|
|UnitedHealth Group Inc||8.01%|
|Thermo Fisher Scientific Inc||4.2%|
|Merck & Co Inc||4.17%|
|Eli Lilly and Co||3.87%|
XLV’s Top Holdings are Johnson & Johnson, UnitedHealth Group Inc, Pfizer Inc, Abbott Laboratories, and AbbVie Inc at 9.19%, 8.01%, 4.64%, 4.36%, and 4.21%.
Thermo Fisher Scientific Inc (4.2%), Merck & Co Inc (4.17%), and Eli Lilly and Co (3.87%) have a slightly smaller but still significant weight. Danaher Corp and Medtronic PLC are also represented in the XLV’s holdings at 3.61% and 3.54%.
The iShares Core S&P Mid-Cap ETF (IJH) has a Beta of 1.15 with a Standard Deviation of 16.8 and a Sharpe Ratio of 0.77. Its Mean Return is 1.13 while IJH’s R-squared is 86.39. Furthermore, the fund has a Alpha of -4.01 and a Treynor Ratio of 10.55.
The Health Care Select Sector SPDR Fund (XLV) has a Sharpe Ratio of 1.13 with a Beta of 0.7 and a Mean Return of 1.27. Its Treynor Ratio is 21.1 while XLV’s Alpha is 7.75. Furthermore, the fund has a Standard Deviation of 12.94 and a R-squared of 58.19.
IJH’s Mean Return is 0.14 points lower than that of XLV and its R-squared is 28.20 points higher. With a Standard Deviation of 16.8, IJH is slightly more volatile than XLV. The Alpha and Beta of IJH are 11.76 points lower and 0.45 points higher than XLV’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 2013 was the strongest year for XLV, returning 41.24% on an annual basis. The poorest year for XLV in the last ten years was 2016, with a yield of -2.83%. Most years the Health Care Select Sector SPDR Fund has given investors modest returns, such as in 2011, 2020, and 2012, when gains were 12.44%, 13.33%, and 17.56% 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 XLV, the end total would have been $44,147. This equates to a $34,147 profit over 11 years and a compound annual growth rate (CAGR) of 15.02%.
IJH’s CAGR is 1.53 percentage points lower than that of XLV and as a result, would have yielded $6,881 less on a $10,000 investment. Thus, IJH performed worse than XLV by 1.53% annually.
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