The iShares Core S&P Small-Cap ETF (IJR) and the Vanguard Health Care Index Fund ETF Shares (VHT) are both among the Top 100 ETFs. IJR is a iShares Small Blend fund and VHT is a Vanguard Health fund. So, what’s the difference between IJR and VHT? And which fund is better?
The expense ratio of IJR is 0.04 percentage points lower than VHT’s (0.06% vs. 0.1%). IJR also has a higher exposure to the industrials sector and a higher standard deviation. Overall, IJR has provided lower returns than VHT over the past ten years.
In this article, we’ll compare IJR vs. VHT. We’ll look at fund composition and industry exposure, as well as at their performance and holdings. Moreover, I’ll also discuss IJR’s and VHT’s portfolio growth, risk metrics, and annual returns and examine how these affect their overall returns.
|Name||iShares Core S&P Small-Cap ETF||Vanguard Health Care Index Fund ETF Shares|
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 Vanguard Health Care Index Fund ETF Shares (VHT) is a Health fund that is issued by Vanguard. It currently has 17.94B total assets under management and has yielded an average annual return of 16.04% over the past 10 years. The fund has a dividend yield of 1.15% with an expense ratio of 0.1%.
IJR’s dividend yield is 0.19% lower than that of VHT (0.96% vs. 1.15%). Also, IJR yielded on average 2.07% less per year over the past decade (13.97% vs. 16.04%). The expense ratio of IJR is 0.04 percentage points lower than VHT’s (0.06% vs. 0.1%).
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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 Vanguard Health Care Index Fund ETF Shares (VHT) has the most exposure to the Healthcare sector at 99.57%. This is followed by Basic Materials and Technology at 0.31% and 0.05% respectively. Real Estate (0.0%), Consumer Defensive (0.0%), and Utilities (0.0%) only make up 0.00% of the fund’s total assets.
VHT’s mid-section with moderate exposure is comprised of Communication Services, Energy, Financial Services, Industrials, and Technology stocks at 0.0%, 0.0%, 0.02%, 0.05%, and 0.05%.
IJR is 17.26% more exposed to the Industrials sector than VHT (17.31% vs 0.05%). IJR’s exposure to Financial Services and Technology stocks is 15.89% higher and 14.27% higher respectively (15.91% vs. 0.02% and 14.32% vs. 0.05%). In total, Communication Services, Energy, and Consumer Defensive also make up 10.60% more of the fund’s holdings compared to VHT (10.60% vs. 0.00%).
|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%.
|Johnson & Johnson||7.34%|
|UnitedHealth Group Inc||6.44%|
|Thermo Fisher Scientific Inc||3.37%|
|Merck & Co Inc||3.33%|
|Eli Lilly and Co||3.17%|
VHT’s Top Holdings are Johnson & Johnson, UnitedHealth Group Inc, Pfizer Inc, Abbott Laboratories, and Thermo Fisher Scientific Inc at 7.34%, 6.44%, 3.7%, 3.48%, and 3.37%.
AbbVie Inc (3.37%), Merck & Co Inc (3.33%), and Eli Lilly and Co (3.17%) have a slightly smaller but still significant weight. Danaher Corp and Medtronic PLC are also represented in the VHT’s holdings at 2.91% and 2.83%.
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The iShares Core S&P Small-Cap ETF (IJR) has a Alpha of -3.7 with a Treynor Ratio of 10.77 and a Beta of 1.2. Its R-squared is 76.03 while IJR’s Sharpe Ratio is 0.74. Furthermore, the fund has a Mean Return of 1.21 and a Standard Deviation of 18.68.
The Vanguard Health Care Index Fund ETF Shares (VHT) has a Mean Return of 1.33 with a Alpha of 7.99 and a Sharpe Ratio of 1.13. Its R-squared is 59.86 while VHT’s Treynor Ratio is 20.74. Furthermore, the fund has a Beta of 0.75 and a Standard Deviation of 13.58.
IJR’s Mean Return is 0.12 points lower than that of VHT and its R-squared is 16.17 points higher. With a Standard Deviation of 18.68, IJR is slightly more volatile than VHT. The Alpha and Beta of IJR are 11.69 points lower and 0.45 points higher than VHT’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 VHT, returning 42.67% on an annual basis. The poorest year for VHT in the last ten years was 2016, with a yield of -3.33%. Most years the Vanguard Health Care Index Fund ETF Shares has given investors modest returns, such as in 2011, 2020, and 2012, when gains were 10.57%, 18.21%, and 19.1% 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 VHT, the end total would have been $48,464. This equates to a $38,464 profit over 11 years and a compound annual growth rate (CAGR) of 16.04%.
IJR’s CAGR is 2.07 percentage points lower than that of VHT and as a result, would have yielded $9,664 less on a $10,000 investment. Thus, IJR performed worse than VHT by 2.07% annually.
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