The iShares Core S&P Small-Cap ETF (IJR) and the Vanguard Intermediate-Term Bond Index Fund ETF Shares (BIV) are both among the Top 100 ETFs. IJR is a iShares Small Blend fund and BIV is a Vanguard Intermediate-Term Bond fund. So, what’s the difference between IJR and BIV? And which fund is better?
The expense ratio of IJR is 0.01 percentage points higher than BIV’s (0.06% vs. 0.05%). IJR also has a high exposure to the industrials sector while BIV is mostly comprised of AAA bonds. Overall, IJR has provided higher returns than BIV over the past ten years.
In this article, we’ll compare IJR vs. BIV. We’ll look at industry exposure and holdings, as well as at their portfolio growth and annual returns. Moreover, I’ll also discuss IJR’s and BIV’s risk metrics, performance, and fund composition and examine how these affect their overall returns.
Summary
| IJR | BIV | |
| Name | iShares Core S&P Small-Cap ETF | Vanguard Intermediate-Term Bond Index Fund ETF Shares |
| Category | Small Blend | Intermediate-Term Bond |
| Issuer | iShares | Vanguard |
| AUM | 68.64B | 39.05B |
| Avg. Return | 13.97% | 5.31% |
| Div. Yield | 0.96% | 2.06% |
| Expense Ratio | 0.06% | 0.05% |
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 Intermediate-Term Bond Index Fund ETF Shares (BIV) is a Intermediate-Term Bond fund that is issued by Vanguard. It currently has 39.05B total assets under management and has yielded an average annual return of 5.31% over the past 10 years. The fund has a dividend yield of 2.06% with an expense ratio of 0.05%.
IJR’s dividend yield is 1.10% lower than that of BIV (0.96% vs. 2.06%). Also, IJR yielded on average 8.65% more per year over the past decade (13.97% vs. 5.31%). The expense ratio of IJR is 0.01 percentage points higher than BIV’s (0.06% vs. 0.05%).
Fund Composition
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%.
| BIV Bond Sectors | Weight |
| AAA | 54.51% |
| BBB | 25.24% |
| A | 16.97% |
| AA | 3.1% |
| Others | 0.15% |
| Below B | 0.03% |
| B | 0.0% |
| BB | 0.0% |
| US Government | 0.0% |
BIV’s Top Bond Sectors are ratings of AAA, BBB, A, AA, and Others at 54.51%, 25.24%, 16.97%, 3.1%, and 0.15%. The fund is less weighted towards Below B (0.03%), B (0.0%), and BB (0.0%) rated bonds.
Risk Analysis
| IJR | BIV | |
| Mean Return | 1.21 | 0.35 |
| R-squared | 76.03 | 95.12 |
| Std. Deviation | 18.68 | 4.09 |
| Alpha | -3.7 | -0.07 |
| Beta | 1.2 | 1.33 |
| Sharpe Ratio | 0.74 | 0.89 |
| Treynor Ratio | 10.77 | 2.72 |
The iShares Core S&P Small-Cap ETF (IJR) has a R-squared of 76.03 with a Sharpe Ratio of 0.74 and a Beta of 1.2. Its Mean Return is 1.21 while IJR’s Treynor Ratio is 10.77. Furthermore, the fund has a Alpha of -3.7 and a Standard Deviation of 18.68.
The Vanguard Intermediate-Term Bond Index Fund ETF Shares (BIV) has a Sharpe Ratio of 0.89 with a R-squared of 95.12 and a Mean Return of 0.35. Its Beta is 1.33 while BIV’s Treynor Ratio is 2.72. Furthermore, the fund has a Alpha of -0.07 and a Standard Deviation of 4.09.
IJR’s Mean Return is 0.86 points higher than that of BIV and its R-squared is 19.09 points lower. With a Standard Deviation of 18.68, IJR is slightly more volatile than BIV. The Alpha and Beta of IJR are 3.63 points lower and 0.13 points lower than BIV’s Alpha and Beta.
Performance
Annual Returns
| Year | IJR | BIV |
| 2020 | 11.24% | 9.71% |
| 2019 | 22.79% | 10.19% |
| 2018 | -8.43% | -0.09% |
| 2017 | 13.2% | 3.8% |
| 2016 | 26.49% | 2.86% |
| 2015 | -2.0% | 1.23% |
| 2014 | 5.67% | 7.0% |
| 2013 | 41.36% | -3.44% |
| 2012 | 16.28% | 7.02% |
| 2011 | 0.9% | 10.62% |
| 2010 | 26.14% | 9.55% |
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 2011 was the strongest year for BIV, returning 10.62% on an annual basis. The poorest year for BIV in the last ten years was 2013, with a yield of -3.44%. Most years the Vanguard Intermediate-Term Bond Index Fund ETF Shares has given investors modest returns, such as in 2017, 2014, and 2012, when gains were 3.8%, 7.0%, and 7.02% respectively.
Portfolio Growth
| Fund | Initial Balance | Final Balance | CAGR |
| IJR | $10,000 | $38,800 | 13.97% |
| BIV | $10,000 | $17,492 | 5.31% |
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 BIV, the end total would have been $17,492. This equates to a $7,492 profit over 11 years and a compound annual growth rate (CAGR) of 5.31%.
IJR’s CAGR is 8.65 percentage points higher than that of BIV and as a result, would have yielded $21,308 more on a $10,000 investment. Thus, IJR outperformed BIV by 8.65% annually.
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