IJR vs. ACWI: What’s The Difference?

The iShares Core S&P Small-Cap ETF (IJR) and the iShares MSCI ACWI ETF (ACWI) are both among the Top 100 ETFs. IJR is a iShares Small Blend fund and ACWI is a iShares N/A fund. So, what’s the difference between IJR and ACWI? And which fund is better?

The expense ratio of IJR is 0.26 percentage points lower than ACWI’s (0.06% vs. 0.32%). IJR also has a higher exposure to the industrials sector and a higher standard deviation. Overall, IJR has provided higher returns than ACWI over the past ten years.

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

Summary

IJR ACWI
Name iShares Core S&P Small-Cap ETF iShares MSCI ACWI ETF
Category Small Blend N/A
Issuer iShares iShares
AUM 68.64B 16.85B
Avg. Return 13.97% 10.21%
Div. Yield 0.96% 1.39%
Expense Ratio 0.06% 0.32%

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 iShares MSCI ACWI ETF (ACWI) is a N/A fund that is issued by iShares. It currently has 16.85B total assets under management and has yielded an average annual return of 10.21% over the past 10 years. The fund has a dividend yield of 1.39% with an expense ratio of 0.32%.

IJR’s dividend yield is 0.43% lower than that of ACWI (0.96% vs. 1.39%). Also, IJR yielded on average 3.75% more per year over the past decade (13.97% vs. 10.21%). The expense ratio of IJR is 0.26 percentage points lower than ACWI’s (0.06% vs. 0.32%).

Fund Composition

Industry Exposure

IJR vs. ACWI - Industry Exposure

IJR ACWI
Technology 14.32% 20.41%
Industrials 17.31% 9.65%
Energy 4.0% 3.48%
Communication Services 2.59% 9.87%
Utilities 1.8% 2.61%
Healthcare 11.55% 11.74%
Consumer Defensive 4.01% 7.15%
Real Estate 9.55% 2.75%
Financial Services 15.91% 15.58%
Consumer Cyclical 13.61% 12.01%
Basic Materials 5.34% 4.73%

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 iShares MSCI ACWI ETF (ACWI) has the most exposure to the Technology sector at 20.41%. This is followed by Financial Services and Consumer Cyclical at 15.58% and 12.01% respectively. Real Estate (2.75%), Energy (3.48%), and Basic Materials (4.73%) only make up 10.96% of the fund’s total assets.

ACWI’s mid-section with moderate exposure is comprised of Consumer Defensive, Industrials, Communication Services, Healthcare, and Consumer Cyclical stocks at 7.15%, 9.65%, 9.87%, 11.74%, and 12.01%.

IJR is 7.66% more exposed to the Industrials sector than ACWI (17.31% vs 9.65%). IJR’s exposure to Financial Services and Technology stocks is 0.33% higher and 6.09% lower respectively (15.91% vs. 15.58% and 14.32% vs. 20.41%). In total, Communication Services, Energy, and Consumer Defensive also make up 9.90% less of the fund’s holdings compared to ACWI (10.60% vs. 20.50%).

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%.

ACWI - Holdings

ACWI Holdings Weight
Apple Inc 3.44%
Microsoft Corp 2.91%
Amazon.com Inc 2.21%
Facebook Inc A 1.25%
Alphabet Inc Class C 1.12%
Alphabet Inc A 1.09%
Taiwan Semiconductor Manufacturing Co Ltd 0.79%
Tesla Inc 0.78%
NVIDIA Corp 0.74%
JPMorgan Chase & Co 0.71%

ACWI’s Top Holdings are Apple Inc, Microsoft Corp, Amazon.com Inc, Facebook Inc A, and Alphabet Inc Class C at 3.44%, 2.91%, 2.21%, 1.25%, and 1.12%.

Alphabet Inc A (1.09%), Taiwan Semiconductor Manufacturing Co Ltd (0.79%), and Tesla Inc (0.78%) have a slightly smaller but still significant weight. NVIDIA Corp and JPMorgan Chase & Co are also represented in the ACWI’s holdings at 0.74% and 0.71%.

Risk Analysis

IJR ACWI
Mean Return 1.21 0.89
R-squared 76.03 99.96
Std. Deviation 18.68 14.05
Alpha -3.7 0.15
Beta 1.2 1
Sharpe Ratio 0.74 0.71
Treynor Ratio 10.77 9.45

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

The iShares MSCI ACWI ETF (ACWI) has a Alpha of 0.15 with a Beta of 1 and a Standard Deviation of 14.05. Its Treynor Ratio is 9.45 while ACWI’s R-squared is 99.96. Furthermore, the fund has a Mean Return of 0.89 and a Sharpe Ratio of 0.71.

IJR’s Mean Return is 0.32 points higher than that of ACWI and its R-squared is 23.93 points lower. With a Standard Deviation of 18.68, IJR is slightly more volatile than ACWI. The Alpha and Beta of IJR are 3.85 points lower and 0.20 points higher than ACWI’s Alpha and Beta.

Performance

Annual Returns

IJR vs. ACWI - Annual Returns

Year IJR ACWI
2020 11.24% 16.38%
2019 22.79% 26.7%
2018 -8.43% -9.15%
2017 13.2% 24.35%
2016 26.49% 8.22%
2015 -2.0% -2.39%
2014 5.67% 4.64%
2013 41.36% 22.91%
2012 16.28% 15.99%
2011 0.9% -7.6%
2010 26.14% 12.31%

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 2019 was the strongest year for ACWI, returning 26.7% on an annual basis. The poorest year for ACWI in the last ten years was 2018, with a yield of -9.15%. Most years the iShares MSCI ACWI ETF has given investors modest returns, such as in 2016, 2010, and 2012, when gains were 8.22%, 12.31%, and 15.99% respectively.

Portfolio Growth

IJR vs. ACWI - Portfolio Growth

Fund Initial Balance Final Balance CAGR
IJR $10,000 $38,800 13.97%
ACWI $10,000 $27,241 10.21%

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 ACWI, the end total would have been $27,241. This equates to a $17,241 profit over 11 years and a compound annual growth rate (CAGR) of 10.21%.

IJR’s CAGR is 3.75 percentage points higher than that of ACWI and as a result, would have yielded $11,559 more on a $10,000 investment. Thus, IJR outperformed ACWI by 3.75% annually.


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