IJR vs. EFV: What’s The Difference?

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

The expense ratio of IJR is 0.33 percentage points lower than EFV’s (0.06% vs. 0.39%). IJR also has a higher exposure to the industrials sector and a higher standard deviation. Overall, IJR has provided higher returns than EFV over the past ten years.

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

Summary

IJR EFV
Name iShares Core S&P Small-Cap ETF iShares MSCI EAFE Value ETF
Category Small Blend Foreign Large Value
Issuer iShares iShares
AUM 68.64B 14.37B
Avg. Return 13.97% 3.99%
Div. Yield 0.96% 2.94%
Expense Ratio 0.06% 0.39%

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 EAFE Value ETF (EFV) is a Foreign Large Value fund that is issued by iShares. It currently has 14.37B total assets under management and has yielded an average annual return of 3.99% over the past 10 years. The fund has a dividend yield of 2.94% with an expense ratio of 0.39%.

IJR’s dividend yield is 1.98% lower than that of EFV (0.96% vs. 2.94%). Also, IJR yielded on average 9.97% more per year over the past decade (13.97% vs. 3.99%). The expense ratio of IJR is 0.33 percentage points lower than EFV’s (0.06% vs. 0.39%).

Fund Composition

Industry Exposure

IJR vs. EFV - Industry Exposure

IJR EFV
Technology 14.32% 2.98%
Industrials 17.31% 11.6%
Energy 4.0% 6.6%
Communication Services 2.59% 6.46%
Utilities 1.8% 6.14%
Healthcare 11.55% 9.19%
Consumer Defensive 4.01% 6.82%
Real Estate 9.55% 5.06%
Financial Services 15.91% 26.55%
Consumer Cyclical 13.61% 9.0%
Basic Materials 5.34% 9.59%

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 EAFE Value ETF (EFV) has the most exposure to the Financial Services sector at 26.55%. This is followed by Industrials and Basic Materials at 11.6% and 9.59% respectively. Real Estate (5.06%), Utilities (6.14%), and Communication Services (6.46%) only make up 17.66% of the fund’s total assets.

EFV’s mid-section with moderate exposure is comprised of Energy, Consumer Defensive, Consumer Cyclical, Healthcare, and Basic Materials stocks at 6.6%, 6.82%, 9.0%, 9.19%, and 9.59%.

IJR is 5.71% more exposed to the Industrials sector than EFV (17.31% vs 11.6%). IJR’s exposure to Financial Services and Technology stocks is 10.64% lower and 11.34% higher respectively (15.91% vs. 26.55% and 14.32% vs. 2.98%). In total, Communication Services, Energy, and Consumer Defensive also make up 9.28% less of the fund’s holdings compared to EFV (10.60% vs. 19.88%).

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%.

EFV - Holdings

EFV Holdings Weight
Novartis AG 2.41%
Toyota Motor Corp 2.21%
Commonwealth Bank of Australia 1.59%
Siemens AG 1.45%
Sanofi SA 1.42%
HSBC Holdings PLC 1.4%
TotalEnergies SE 1.35%
Allianz SE 1.23%
GlaxoSmithKline PLC 1.18%
Rio Tinto PLC 1.1%

EFV’s Top Holdings are Novartis AG, Toyota Motor Corp, Commonwealth Bank of Australia, Siemens AG, and Sanofi SA at 2.41%, 2.21%, 1.59%, 1.45%, and 1.42%.

HSBC Holdings PLC (1.4%), TotalEnergies SE (1.35%), and Allianz SE (1.23%) have a slightly smaller but still significant weight. GlaxoSmithKline PLC and Rio Tinto PLC are also represented in the EFV’s holdings at 1.18% and 1.1%.

Risk Analysis

IJR EFV
Mean Return 1.21 0.42
R-squared 76.03 92.15
Std. Deviation 18.68 16.53
Alpha -3.7 -1.77
Beta 1.2 1.05
Sharpe Ratio 0.74 0.26
Treynor Ratio 10.77 2.92

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

The iShares MSCI EAFE Value ETF (EFV) has a Standard Deviation of 16.53 with a Alpha of -1.77 and a Treynor Ratio of 2.92. Its Mean Return is 0.42 while EFV’s R-squared is 92.15. Furthermore, the fund has a Beta of 1.05 and a Sharpe Ratio of 0.26.

IJR’s Mean Return is 0.79 points higher than that of EFV and its R-squared is 16.12 points lower. With a Standard Deviation of 18.68, IJR is slightly more volatile than EFV. The Alpha and Beta of IJR are 1.93 points lower and 0.15 points higher than EFV’s Alpha and Beta.

Performance

Annual Returns

IJR vs. EFV - Annual Returns

Year IJR EFV
2020 11.24% -2.78%
2019 22.79% 15.97%
2018 -8.43% -14.88%
2017 13.2% 21.22%
2016 26.49% 4.87%
2015 -2.0% -5.89%
2014 5.67% -5.65%
2013 41.36% 22.61%
2012 16.28% 17.52%
2011 0.9% -12.24%
2010 26.14% 3.18%

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 EFV, returning 22.61% on an annual basis. The poorest year for EFV in the last ten years was 2018, with a yield of -14.88%. Most years the iShares MSCI EAFE Value ETF has given investors modest returns, such as in 2020, 2010, and 2016, when gains were -2.78%, 3.18%, and 4.87% respectively.

Portfolio Growth

IJR vs. EFV - Portfolio Growth

Fund Initial Balance Final Balance CAGR
IJR $10,000 $38,800 13.97%
EFV $10,000 $14,134 3.99%

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 EFV, the end total would have been $14,134. This equates to a $4,134 profit over 11 years and a compound annual growth rate (CAGR) of 3.99%.

IJR’s CAGR is 9.97 percentage points higher than that of EFV and as a result, would have yielded $24,666 more on a $10,000 investment. Thus, IJR outperformed EFV by 9.97% annually.


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