The iShares Core S&P Small-Cap ETF (IJR) and the Vanguard Short-Term Bond Index Fund ETF Shares (BSV) are both among the Top 100 ETFs. IJR is a iShares Small Blend fund and BSV is a Vanguard Short-Term Bond fund. So, what’s the difference between IJR and BSV? And which fund is better?
The expense ratio of IJR is 0.01 percentage points higher than BSV’s (0.06% vs. 0.05%). IJR also has a high exposure to the industrials sector while BSV is mostly comprised of AAA bonds. Overall, IJR has provided higher returns than BSV over the past ten years.
In this article, we’ll compare IJR vs. BSV. We’ll look at holdings and annual returns, as well as at their performance and fund composition. Moreover, I’ll also discuss IJR’s and BSV’s risk metrics, portfolio growth, and industry exposure and examine how these affect their overall returns.
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Summary
| IJR | BSV | |
| Name | iShares Core S&P Small-Cap ETF | Vanguard Short-Term Bond Index Fund ETF Shares |
| Category | Small Blend | Short-Term Bond |
| Issuer | iShares | Vanguard |
| AUM | 68.64B | 67.71B |
| Avg. Return | 13.97% | 2.27% |
| Div. Yield | 0.96% | 1.48% |
| 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 Short-Term Bond Index Fund ETF Shares (BSV) is a Short-Term Bond fund that is issued by Vanguard. It currently has 67.71B total assets under management and has yielded an average annual return of 2.27% over the past 10 years. The fund has a dividend yield of 1.48% with an expense ratio of 0.05%.
IJR’s dividend yield is 0.52% lower than that of BSV (0.96% vs. 1.48%). Also, IJR yielded on average 11.70% more per year over the past decade (13.97% vs. 2.27%). The expense ratio of IJR is 0.01 percentage points higher than BSV’s (0.06% vs. 0.05%).
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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%.
| BSV Bond Sectors | Weight |
| AAA | 71.65% |
| BBB | 13.08% |
| A | 11.95% |
| AA | 3.28% |
| Others | 0.03% |
| Below B | 0.01% |
| B | 0.0% |
| BB | 0.0% |
| US Government | 0.0% |
BSV’s Top Bond Sectors are ratings of AAA, BBB, A, AA, and Others at 71.65%, 13.08%, 11.95%, 3.28%, and 0.03%. The fund is less weighted towards Below B (0.01%), B (0.0%), and BB (0.0%) rated bonds.
Risk Analysis
| IJR | BSV | |
| Mean Return | 1.21 | 0.16 |
| R-squared | 76.03 | 78.38 |
| Std. Deviation | 18.68 | 1.33 |
| Alpha | -3.7 | 0.21 |
| Beta | 1.2 | 0.38 |
| Sharpe Ratio | 0.74 | 0.98 |
| Treynor Ratio | 10.77 | 3.33 |
The iShares Core S&P Small-Cap ETF (IJR) has a Treynor Ratio of 10.77 with a Standard Deviation of 18.68 and a Alpha of -3.7. Its R-squared is 76.03 while IJR’s Mean Return is 1.21. Furthermore, the fund has a Beta of 1.2 and a Sharpe Ratio of 0.74.
The Vanguard Short-Term Bond Index Fund ETF Shares (BSV) has a Standard Deviation of 1.33 with a Mean Return of 0.16 and a Sharpe Ratio of 0.98. Its R-squared is 78.38 while BSV’s Alpha is 0.21. Furthermore, the fund has a Treynor Ratio of 3.33 and a Beta of 0.38.
IJR’s Mean Return is 1.05 points higher than that of BSV and its R-squared is 2.35 points lower. With a Standard Deviation of 18.68, IJR is slightly more volatile than BSV. The Alpha and Beta of IJR are 3.91 points lower and 0.82 points higher than BSV’s Alpha and Beta.
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Performance
Annual Returns
| Year | IJR | BSV |
| 2020 | 11.24% | 4.67% |
| 2019 | 22.79% | 4.92% |
| 2018 | -8.43% | 1.34% |
| 2017 | 13.2% | 1.2% |
| 2016 | 26.49% | 1.42% |
| 2015 | -2.0% | 0.92% |
| 2014 | 5.67% | 1.32% |
| 2013 | 41.36% | 0.17% |
| 2012 | 16.28% | 1.98% |
| 2011 | 0.9% | 3.04% |
| 2010 | 26.14% | 4.0% |
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 BSV, returning 4.92% on an annual basis. The poorest year for BSV in the last ten years was 2013, with a yield of 0.17%. Most years the Vanguard Short-Term Bond Index Fund ETF Shares has given investors modest returns, such as in 2018, 2016, and 2012, when gains were 1.34%, 1.42%, and 1.98% respectively.
Portfolio Growth
| Fund | Initial Balance | Final Balance | CAGR |
| IJR | $10,000 | $38,800 | 13.97% |
| BSV | $10,000 | $12,785 | 2.27% |
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 BSV, the end total would have been $12,785. This equates to a $2,785 profit over 11 years and a compound annual growth rate (CAGR) of 2.27%.
IJR’s CAGR is 11.70 percentage points higher than that of BSV and as a result, would have yielded $26,015 more on a $10,000 investment. Thus, IJR outperformed BSV by 11.70% annually.
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