The iShares Core S&P Mid-Cap ETF (IJH) and the Consumer Discretionary Select Sector SPDR Fund (XLY) are both among the Top 100 ETFs. IJH is a iShares Mid-Cap Blend fund and XLY is a SPDR State Street Global Advisors Consumer Cyclical fund. So, what’s the difference between IJH and XLY? And which fund is better?
The expense ratio of IJH is 0.07 percentage points lower than XLY’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 XLY over the past ten years.
In this article, we’ll compare IJH vs. XLY. We’ll look at holdings and industry exposure, as well as at their fund composition and performance. Moreover, I’ll also discuss IJH’s and XLY’s annual returns, portfolio growth, and risk metrics and examine how these affect their overall returns.
Summary
| IJH | XLY | |
| Name | iShares Core S&P Mid-Cap ETF | Consumer Discretionary Select Sector SPDR Fund |
| Category | Mid-Cap Blend | Consumer Cyclical |
| Issuer | iShares | SPDR State Street Global Advisors |
| AUM | 63.4B | 20.21B |
| Avg. Return | 13.50% | 18.86% |
| Div. Yield | 1.07% | 0.63% |
| 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 Consumer Discretionary Select Sector SPDR Fund (XLY) is a Consumer Cyclical fund that is issued by SPDR State Street Global Advisors. It currently has 20.21B total assets under management and has yielded an average annual return of 18.86% over the past 10 years. The fund has a dividend yield of 0.63% with an expense ratio of 0.12%.
IJH’s dividend yield is 0.44% higher than that of XLY (1.07% vs. 0.63%). Also, IJH yielded on average 5.36% less per year over the past decade (13.50% vs. 18.86%). The expense ratio of IJH is 0.07 percentage points lower than XLY’s (0.05% vs. 0.12%).
Fund Composition
Industry Exposure
| IJH | XLY | |
| Technology | 14.81% | 0.57% |
| Industrials | 18.09% | 0.0% |
| 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% | 5.34% |
| Real Estate | 10.04% | 0.0% |
| Financial Services | 14.85% | 0.0% |
| Consumer Cyclical | 14.91% | 94.1% |
| 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 Consumer Discretionary Select Sector SPDR Fund (XLY) has the most exposure to the Consumer Cyclical sector at 94.1%. This is followed by Consumer Defensive and Technology at 5.34% and 0.57% respectively. Financial Services (0.0%), Real Estate (0.0%), and Healthcare (0.0%) only make up 0.00% of the fund’s total assets.
XLY’s mid-section with moderate exposure is comprised of Utilities, Communication Services, Energy, Industrials, and Technology stocks at 0.0%, 0.0%, 0.0%, 0.0%, and 0.57%.
IJH is 18.09% more exposed to the Industrials sector than XLY (18.09% vs 0.0%). IJH’s exposure to Consumer Cyclical and Financial Services stocks is 79.19% lower and 14.85% higher respectively (14.91% vs. 94.1% and 14.85% vs. 0.0%). In total, Energy, Utilities, and Consumer Defensive also make up 4.08% more of the fund’s holdings compared to XLY (9.42% vs. 5.34%).
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%.
| XLY Holdings | Weight |
| Amazon.com Inc | 22.9% |
| Tesla Inc | 13.5% |
| The Home Depot Inc | 8.74% |
| McDonald’s Corp | 4.5% |
| Nike Inc B | 4.45% |
| Lowe’s Companies Inc | 3.58% |
| Starbucks Corp | 3.44% |
| Target Corp | 3.12% |
| Booking Holdings Inc | 2.35% |
| TJX Companies Inc | 2.12% |
XLY’s Top Holdings are Amazon.com Inc, Tesla Inc, The Home Depot Inc, McDonald’s Corp, and Nike Inc B at 22.9%, 13.5%, 8.74%, 4.5%, and 4.45%.
Lowe’s Companies Inc (3.58%), Starbucks Corp (3.44%), and Target Corp (3.12%) have a slightly smaller but still significant weight. Booking Holdings Inc and TJX Companies Inc are also represented in the XLY’s holdings at 2.35% and 2.12%.
Risk Analysis
| IJH | XLY | |
| Mean Return | 1.13 | 1.47 |
| R-squared | 86.39 | 80.84 |
| Std. Deviation | 16.8 | 15.97 |
| Alpha | -4.01 | 6.96 |
| Beta | 1.15 | 1.02 |
| Sharpe Ratio | 0.77 | 1.06 |
| Treynor Ratio | 10.55 | 16.69 |
The iShares Core S&P Mid-Cap ETF (IJH) has a Standard Deviation of 16.8 with a Beta of 1.15 and a Mean Return of 1.13. Its R-squared is 86.39 while IJH’s Treynor Ratio is 10.55. Furthermore, the fund has a Sharpe Ratio of 0.77 and a Alpha of -4.01.
The Consumer Discretionary Select Sector SPDR Fund (XLY) has a Alpha of 6.96 with a Beta of 1.02 and a R-squared of 80.84. Its Sharpe Ratio is 1.06 while XLY’s Treynor Ratio is 16.69. Furthermore, the fund has a Mean Return of 1.47 and a Standard Deviation of 15.97.
IJH’s Mean Return is 0.34 points lower than that of XLY and its R-squared is 5.55 points higher. With a Standard Deviation of 16.8, IJH is slightly more volatile than XLY. The Alpha and Beta of IJH are 10.97 points lower and 0.13 points higher than XLY’s Alpha and Beta.
Performance
Annual Returns
| Year | IJH | XLY |
| 2020 | 13.61% | 29.66% |
| 2019 | 26.14% | 28.43% |
| 2018 | -11.14% | 1.66% |
| 2017 | 16.19% | 22.77% |
| 2016 | 20.63% | 5.87% |
| 2015 | -2.23% | 9.93% |
| 2014 | 9.64% | 9.49% |
| 2013 | 33.4% | 42.74% |
| 2012 | 17.76% | 23.6% |
| 2011 | -1.89% | 5.98% |
| 2010 | 26.38% | 27.36% |
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 XLY, returning 42.74% on an annual basis. The poorest year for XLY in the last ten years was 2018, with a yield of 1.66%. Most years the Consumer Discretionary Select Sector SPDR Fund has given investors modest returns, such as in 2015, 2017, and 2012, when gains were 9.93%, 22.77%, and 23.6% respectively.
Portfolio Growth
| Fund | Initial Balance | Final Balance | CAGR |
| IJH | $10,000 | $37,266 | 13.50% |
| XLY | $10,000 | $63,066 | 18.86% |
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 XLY, the end total would have been $63,066. This equates to a $53,066 profit over 11 years and a compound annual growth rate (CAGR) of 18.86%.
IJH’s CAGR is 5.36 percentage points lower than that of XLY and as a result, would have yielded $25,800 less on a $10,000 investment. Thus, IJH performed worse than XLY by 5.36% annually.
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