The Vanguard Total Stock Market Index Fund ETF Shares (VTI) and the iShares Core S&P Mid-Cap ETF (IJH) are both among the Top 100 ETFs. VTI is a Vanguard Large Blend fund and IJH is a iShares Mid-Cap Blend fund. So, what’s the difference between VTI and IJH? And which fund is better?
The expense ratio of VTI is 0.02 percentage points lower than IJH’s (0.03% vs. 0.05%). VTI also has a higher exposure to the technology sector and a lower standard deviation. Overall, VTI has provided higher returns than IJH over the past ten years.
In this article, we’ll compare VTI vs. IJH. We’ll look at performance and fund composition, as well as at their industry exposure and risk metrics. Moreover, I’ll also discuss VTI’s and IJH’s annual returns, portfolio growth, and holdings and examine how these affect their overall returns.
|Name||Vanguard Total Stock Market Index Fund ETF Shares||iShares Core S&P Mid-Cap ETF|
|Category||Large Blend||Mid-Cap Blend|
The Vanguard Total Stock Market Index Fund ETF Shares (VTI) is a Large Blend fund that is issued by Vanguard. It currently has 1.26T total assets under management and has yielded an average annual return of 14.70% over the past 10 years. The fund has a dividend yield of 1.26% with an expense ratio of 0.03%.
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%.
VTI’s dividend yield is 0.19% higher than that of IJH (1.26% vs. 1.07%). Also, VTI yielded on average 1.20% more per year over the past decade (14.70% vs. 13.50%). The expense ratio of VTI is 0.02 percentage points lower than IJH’s (0.03% vs. 0.05%).
The Vanguard Total Stock Market Index Fund ETF Shares (VTI) has the most exposure to the Technology sector at 24.1%. This is followed by Financial Services and Healthcare at 13.77% and 13.64% respectively. Basic Materials (2.44%), Energy (2.77%), and Real Estate (3.59%) only make up 8.80% of the fund’s total assets.
VTI’s mid-section with moderate exposure is comprised of Consumer Defensive, Industrials, Communication Services, Consumer Cyclical, and Healthcare stocks at 5.77%, 9.39%, 10.4%, 11.83%, and 13.64%.
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%.
VTI is 9.29% more exposed to the Technology sector than IJH (24.1% vs 14.81%). VTI’s exposure to Financial Services and Healthcare stocks is 1.08% lower and 2.75% higher respectively (13.77% vs. 14.85% and 13.64% vs. 10.89%). In total, Basic Materials, Energy, and Real Estate also make up 9.16% less of the fund’s holdings compared to IJH (8.80% vs. 17.96%).
|Facebook Inc Class A||1.88%|
|Alphabet Inc Class A||1.66%|
|Alphabet Inc Class C||1.56%|
|Berkshire Hathaway Inc Class B||1.09%|
|JPMorgan Chase & Co||1.06%|
VTI’s Top Holdings are Apple Inc, Microsoft Corp, Amazon.com Inc, Facebook Inc Class A, and Alphabet Inc Class A at 4.9%, 4.6%, 3.33%, 1.88%, and 1.66%.
Alphabet Inc Class C (1.56%), Tesla Inc (1.18%), and Berkshire Hathaway Inc Class B (1.09%) have a slightly smaller but still significant weight. NVIDIA Corp and JPMorgan Chase & Co are also represented in the VTI’s holdings at 1.07% and 1.06%.
|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%.
VTI had its best year in 2013 with an annual return of 33.51%. VTI’s worst year over the past decade yielded -5.13% and occurred in 2018. In most years the Vanguard Total Stock Market Index Fund ETF Shares provided moderate returns such as in 2016, 2012, and 2010 where annual returns amounted to 12.68%, 16.41%, and 17.26% respectively.
The year 2013 was the strongest year for IJH, returning 33.4% on an annual basis. The poorest year for IJH in the last ten years was 2018, with a yield of -11.14%. Most years the iShares Core S&P Mid-Cap ETF has given investors modest returns, such as in 2020, 2017, and 2012, when gains were 13.61%, 16.19%, and 17.76% respectively.
|Fund||Initial Balance||Final Balance||CAGR|
A $10,000 investment in VTI would have resulted in a final balance of $42,648. This is a profit of $32,648 over 11 years and amounts to a compound annual growth rate (CAGR) of 14.70%.
With a $10,000 investment in IJH, the end total would have been $37,266. This equates to a $27,266 profit over 11 years and a compound annual growth rate (CAGR) of 13.50%.
VTI’s CAGR is 1.20 percentage points higher than that of IJH and as a result, would have yielded $5,382 more on a $10,000 investment. Thus, VTI outperformed IJH by 1.20% annually.
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