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.
|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|
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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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%).
|BlackRock Cash Funds Treasury SL Agency||1.08%|
|GameStop Corp Class A||0.86%|
|Power Integrations Inc||0.57%|
|Chart Industries Inc||0.53%|
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%.
|Molina Healthcare Inc||0.63%|
|Fair Isaac Corp||0.62%|
|XPO Logistics Inc||0.61%|
|SolarEdge Technologies Inc||0.61%|
|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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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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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.
|Fund||Initial Balance||Final Balance||CAGR|
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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