IJR vs. MDY: What’s The Difference?

The iShares Core S&P Small-Cap ETF (IJR) and the SPDR S&P MIDCAP 400 ETF Trust (MDY) are both among the Top 100 ETFs. IJR is a iShares Small Blend fund and MDY is a SPDR State Street Global Advisors Mid-Cap Blend fund. So, what’s the difference between IJR and MDY? And which fund is better?

The expense ratio of IJR is 0.17 percentage points lower than MDY’s (0.06% vs. 0.23%). IJR also has a lower exposure to the industrials sector and a higher standard deviation. Overall, IJR has provided higher returns than MDY over the past ten years.

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

Summary

IJR MDY
Name iShares Core S&P Small-Cap ETF SPDR S&P MIDCAP 400 ETF Trust
Category Small Blend Mid-Cap Blend
Issuer iShares SPDR State Street Global Advisors
AUM 68.64B 21.31B
Avg. Return 13.97% 13.29%
Div. Yield 0.96% 0.94%
Expense Ratio 0.06% 0.23%

The iShares Core S&P Small-Cap ETF (IJR) is a Small Blend fund that is issued by iShares. It currently has 68.64B total assets under management and has yielded an average annual return of 13.97% over the past 10 years. The fund has a dividend yield of 0.96% with an expense ratio of 0.06%.

The SPDR S&P MIDCAP 400 ETF Trust (MDY) is a Mid-Cap Blend fund that is issued by SPDR State Street Global Advisors. It currently has 21.31B total assets under management and has yielded an average annual return of 13.29% over the past 10 years. The fund has a dividend yield of 0.94% with an expense ratio of 0.23%.

IJR’s dividend yield is 0.02% higher than that of MDY (0.96% vs. 0.94%). Also, IJR yielded on average 0.68% more per year over the past decade (13.97% vs. 13.29%). The expense ratio of IJR is 0.17 percentage points lower than MDY’s (0.06% vs. 0.23%).

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Fund Composition

Industry Exposure

IJR vs. MDY - Industry Exposure

IJR MDY
Technology 14.32% 14.74%
Industrials 17.31% 17.88%
Energy 4.0% 2.52%
Communication Services 2.59% 1.63%
Utilities 1.8% 2.84%
Healthcare 11.55% 11.17%
Consumer Defensive 4.01% 4.2%
Real Estate 9.55% 9.66%
Financial Services 15.91% 15.2%
Consumer Cyclical 13.61% 14.89%
Basic Materials 5.34% 5.27%

The iShares Core S&P Small-Cap ETF (IJR) has the most exposure to the Industrials sector at 17.31%. This is followed by Financial Services and Technology at 15.91% and 14.32% respectively. Communication Services (2.59%), Energy (4.0%), and Consumer Defensive (4.01%) only make up 10.60% of the fund’s total assets.

IJR’s mid-section with moderate exposure is comprised of Basic Materials, Real Estate, Healthcare, Consumer Cyclical, and Technology stocks at 5.34%, 9.55%, 11.55%, 13.61%, and 14.32%.

The SPDR S&P MIDCAP 400 ETF Trust (MDY) has the most exposure to the Industrials sector at 17.88%. This is followed by Financial Services and Consumer Cyclical at 15.2% and 14.89% respectively. Energy (2.52%), Utilities (2.84%), and Consumer Defensive (4.2%) only make up 9.56% of the fund’s total assets.

MDY’s mid-section with moderate exposure is comprised of Basic Materials, Real Estate, Healthcare, Technology, and Consumer Cyclical stocks at 5.27%, 9.66%, 11.17%, 14.74%, and 14.89%.

IJR is 0.57% less exposed to the Industrials sector than MDY (17.31% vs 17.88%). IJR’s exposure to Financial Services and Technology stocks is 0.71% higher and 0.42% lower respectively (15.91% vs. 15.2% and 14.32% vs. 14.74%). In total, Communication Services, Energy, and Consumer Defensive also make up 2.25% more of the fund’s holdings compared to MDY (10.60% vs. 8.35%).

Holdings

IJR - Holdings

IJR Holdings Weight
BlackRock Cash Funds Treasury SL Agency 1.08%
GameStop Corp Class A 0.86%
Omnicell Inc 0.61%
Stamps.com Inc 0.58%
Saia Inc 0.57%
Power Integrations Inc 0.57%
Exponent Inc 0.54%
NeoGenomics Inc 0.53%
Chart Industries Inc 0.53%
Macy’s Inc 0.51%

IJR’s Top Holdings are BlackRock Cash Funds Treasury SL Agency, GameStop Corp Class A, Omnicell Inc, Stamps.com Inc, and Saia Inc at 1.08%, 0.86%, 0.61%, 0.58%, and 0.57%.

Power Integrations Inc (0.57%), Exponent Inc (0.54%), and NeoGenomics Inc (0.53%) have a slightly smaller but still significant weight. Chart Industries Inc and Macy’s Inc are also represented in the IJR’s holdings at 0.53% and 0.51%.

MDY - Holdings

MDY Holdings Weight
Bio-Techne Corp 0.75%
Molina Healthcare Inc 0.63%
Cognex Corp 0.63%
Fair Isaac Corp 0.62%
XPO Logistics Inc 0.61%
SolarEdge Technologies Inc 0.61%
Signature Bank 0.6%
Graco Inc 0.55%
Camden Property Trust 0.55%
FactSet Research Systems Inc 0.54%

MDY’s Top Holdings are Bio-Techne Corp, Molina Healthcare Inc, Cognex Corp, Fair Isaac Corp, and XPO Logistics Inc at 0.75%, 0.63%, 0.63%, 0.62%, and 0.61%.

SolarEdge Technologies Inc (0.61%), Signature Bank (0.6%), and Graco Inc (0.55%) have a slightly smaller but still significant weight. Camden Property Trust and FactSet Research Systems Inc are also represented in the MDY’s holdings at 0.55% and 0.54%.

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Risk Analysis

IJR MDY
Mean Return 1.21 1.08
R-squared 76.03 86.66
Std. Deviation 18.68 16.83
Alpha -3.7 -4.1
Beta 1.2 1.15
Sharpe Ratio 0.74 0.73
Treynor Ratio 10.77 9.97

The iShares Core S&P Small-Cap ETF (IJR) has a Alpha of -3.7 with a Beta of 1.2 and a Standard Deviation of 18.68. Its Mean Return is 1.21 while IJR’s Treynor Ratio is 10.77. Furthermore, the fund has a R-squared of 76.03 and a Sharpe Ratio of 0.74.

The SPDR S&P MIDCAP 400 ETF Trust (MDY) has a Mean Return of 1.08 with a Treynor Ratio of 9.97 and a Beta of 1.15. Its Sharpe Ratio is 0.73 while MDY’s R-squared is 86.66. Furthermore, the fund has a Alpha of -4.1 and a Standard Deviation of 16.83.

IJR’s Mean Return is 0.13 points higher than that of MDY and its R-squared is 10.63 points lower. With a Standard Deviation of 18.68, IJR is slightly more volatile than MDY. The Alpha and Beta of IJR are 0.40 points higher and 0.05 points higher than MDY’s Alpha and Beta.

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Performance

Annual Returns

IJR vs. MDY - Annual Returns

Year IJR MDY
2020 11.24% 13.51%
2019 22.79% 25.86%
2018 -8.43% -11.28%
2017 13.2% 15.89%
2016 26.49% 20.33%
2015 -2.0% -2.4%
2014 5.67% 9.42%
2013 41.36% 33.08%
2012 16.28% 17.58%
2011 0.9% -1.99%
2010 26.14% 26.17%

IJR had its best year in 2013 with an annual return of 41.36%. IJR’s worst year over the past decade yielded -8.43% and occurred in 2018. In most years the iShares Core S&P Small-Cap ETF provided moderate returns such as in 2020, 2017, and 2012 where annual returns amounted to 11.24%, 13.2%, and 16.28% respectively.

The year 2013 was the strongest year for MDY, returning 33.08% on an annual basis. The poorest year for MDY in the last ten years was 2018, with a yield of -11.28%. Most years the SPDR S&P MIDCAP 400 ETF Trust has given investors modest returns, such as in 2020, 2017, and 2012, when gains were 13.51%, 15.89%, and 17.58% respectively.

Portfolio Growth

IJR vs. MDY - Portfolio Growth

Fund Initial Balance Final Balance CAGR
IJR $10,000 $38,800 13.97%
MDY $10,000 $36,524 13.29%

A $10,000 investment in IJR would have resulted in a final balance of $38,800. This is a profit of $28,800 over 11 years and amounts to a compound annual growth rate (CAGR) of 13.97%.

With a $10,000 investment in MDY, the end total would have been $36,524. This equates to a $26,524 profit over 11 years and a compound annual growth rate (CAGR) of 13.29%.

IJR’s CAGR is 0.68 percentage points higher than that of MDY and as a result, would have yielded $2,276 more on a $10,000 investment. Thus, IJR outperformed MDY by 0.68% annually.


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