The iShares Core S&P Small-Cap ETF (IJR) and the Dimensional U.S. Core Equity 2 ETF (DFAC) are both among the Top 100 ETFs. IJR is a iShares Small Blend fund and DFAC is a Dimensional Fund Advisors Large Blend fund. So, what’s the difference between IJR and DFAC? And which fund is better?
The expense ratio of IJR is 0.13 percentage points lower than DFAC’s (0.06% vs. 0.19%). IJR also has a higher exposure to the industrials sector and a higher standard deviation. Overall, IJR has provided higher returns than DFAC over the past ten years.
In this article, we’ll compare IJR vs. DFAC. We’ll look at risk metrics and annual returns, as well as at their portfolio growth and holdings. Moreover, I’ll also discuss IJR’s and DFAC’s performance, industry exposure, and fund composition and examine how these affect their overall returns.
|Name||iShares Core S&P Small-Cap ETF||Dimensional U.S. Core Equity 2 ETF|
|Category||Small Blend||Large Blend|
|Issuer||iShares||Dimensional Fund Advisors|
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 Dimensional U.S. Core Equity 2 ETF (DFAC) is a Large Blend fund that is issued by Dimensional Fund Advisors. It currently has 13.53B total assets under management and has yielded an average annual return of 13.93% over the past 10 years. The fund has a dividend yield of 1.0% with an expense ratio of 0.19%.
IJR’s dividend yield is 0.04% lower than that of DFAC (0.96% vs. 1.0%). Also, IJR yielded on average 0.03% more per year over the past decade (13.97% vs. 13.93%). The expense ratio of IJR is 0.13 percentage points lower than DFAC’s (0.06% vs. 0.19%).
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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 Dimensional U.S. Core Equity 2 ETF (DFAC) has the most exposure to the Technology sector at 22.81%. This is followed by Financial Services and Industrials at 16.17% and 14.13% respectively. Utilities (1.54%), Energy (2.67%), and Basic Materials (3.56%) only make up 7.77% of the fund’s total assets.
DFAC’s mid-section with moderate exposure is comprised of Consumer Defensive, Communication Services, Healthcare, Consumer Cyclical, and Industrials stocks at 5.94%, 7.63%, 12.09%, 13.09%, and 14.13%.
IJR is 3.18% more exposed to the Industrials sector than DFAC (17.31% vs 14.13%). IJR’s exposure to Financial Services and Technology stocks is 0.26% lower and 8.49% lower respectively (15.91% vs. 16.17% and 14.32% vs. 22.81%). In total, Communication Services, Energy, and Consumer Defensive also make up 5.64% less of the fund’s holdings compared to DFAC (10.60% vs. 16.24%).
|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||1.05%|
|Facebook Inc Class A||1.05%|
|JPMorgan Chase & Co||1.0%|
|Alphabet Inc Class C||0.85%|
|Alphabet Inc Class A||0.84%|
|Berkshire Hathaway Inc Class B||0.75%|
|Visa Inc Class A||0.74%|
DFAC’s Top Holdings are Apple Inc, Microsoft Corp, Amazon.com Inc, Johnson & Johnson, and Facebook Inc Class A at 4.7%, 3.81%, 2.39%, 1.05%, and 1.05%.
JPMorgan Chase & Co (1.0%), Alphabet Inc Class C (0.85%), and Alphabet Inc Class A (0.84%) have a slightly smaller but still significant weight. Berkshire Hathaway Inc Class B and Visa Inc Class A are also represented in the DFAC’s holdings at 0.75% and 0.74%.
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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 Treynor Ratio of 10.77. Its Standard Deviation is 18.68 while IJR’s Mean Return is 1.21. Furthermore, the fund has a Beta of 1.2 and a Alpha of -3.7.
The Dimensional U.S. Core Equity 2 ETF (DFAC) has a R-squared of 95.1 with a Treynor Ratio of 11.85 and a Sharpe Ratio of 0.88. Its Standard Deviation is 15.55 while DFAC’s Mean Return is 1.19. Furthermore, the fund has a Beta of 1.12 and a Alpha of -2.75.
IJR’s Mean Return is 0.02 points higher than that of DFAC and its R-squared is 19.07 points lower. With a Standard Deviation of 18.68, IJR is slightly more volatile than DFAC. The Alpha and Beta of IJR are 0.95 points lower and 0.08 points higher than DFAC’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 DFAC, returning 37.55% on an annual basis. The poorest year for DFAC in the last ten years was 2018, with a yield of -9.43%. Most years the Dimensional U.S. Core Equity 2 ETF has given investors modest returns, such as in 2020, 2016, and 2012, when gains were 15.8%, 16.31%, and 17.93% 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 DFAC, the end total would have been $38,796. This equates to a $28,796 profit over 11 years and a compound annual growth rate (CAGR) of 13.93%.
IJR’s CAGR is 0.03 percentage points higher than that of DFAC and as a result, would have yielded $4 more on a $10,000 investment. Thus, IJR outperformed DFAC by 0.03% annually.
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