The iShares Core S&P Small-Cap ETF (IJR) and the iShares Core S&P Total U.S. Stock Market ETF (ITOT) are both among the Top 100 ETFs. IJR is a iShares Small Blend fund and ITOT is a iShares Large Blend fund. So, what’s the difference between IJR and ITOT? And which fund is better?
The expense ratio of IJR is 0.03 percentage points higher than ITOT’s (0.06% vs. 0.03%). IJR also has a higher exposure to the industrials sector and a higher standard deviation. Overall, IJR has provided lower returns than ITOT over the past ten years.
In this article, we’ll compare IJR vs. ITOT. We’ll look at performance and fund composition, as well as at their risk metrics and portfolio growth. Moreover, I’ll also discuss IJR’s and ITOT’s annual returns, industry exposure, and holdings and examine how these affect their overall returns.
Summary
| IJR | ITOT | |
| Name | iShares Core S&P Small-Cap ETF | iShares Core S&P Total U.S. Stock Market ETF |
| Category | Small Blend | Large Blend |
| Issuer | iShares | iShares |
| AUM | 68.64B | 41.97B |
| Avg. Return | 13.97% | 14.59% |
| Div. Yield | 0.96% | 1.2% |
| Expense Ratio | 0.06% | 0.03% |
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 Core S&P Total U.S. Stock Market ETF (ITOT) is a Large Blend fund that is issued by iShares. It currently has 41.97B total assets under management and has yielded an average annual return of 14.59% over the past 10 years. The fund has a dividend yield of 1.2% with an expense ratio of 0.03%.
IJR’s dividend yield is 0.24% lower than that of ITOT (0.96% vs. 1.2%). Also, IJR yielded on average 0.62% less per year over the past decade (13.97% vs. 14.59%). The expense ratio of IJR is 0.03 percentage points higher than ITOT’s (0.06% vs. 0.03%).
Fund Composition
Industry Exposure
| IJR | ITOT | |
| Technology | 14.32% | 24.49% |
| Industrials | 17.31% | 9.21% |
| Energy | 4.0% | 2.51% |
| Communication Services | 2.59% | 10.54% |
| Utilities | 1.8% | 2.35% |
| Healthcare | 11.55% | 13.59% |
| Consumer Defensive | 4.01% | 5.79% |
| Real Estate | 9.55% | 3.67% |
| Financial Services | 15.91% | 13.69% |
| Consumer Cyclical | 13.61% | 11.69% |
| Basic Materials | 5.34% | 2.47% |
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 Core S&P Total U.S. Stock Market ETF (ITOT) has the most exposure to the Technology sector at 24.49%. This is followed by Financial Services and Healthcare at 13.69% and 13.59% respectively. Basic Materials (2.47%), Energy (2.51%), and Real Estate (3.67%) only make up 8.65% of the fund’s total assets.
ITOT’s mid-section with moderate exposure is comprised of Consumer Defensive, Industrials, Communication Services, Consumer Cyclical, and Healthcare stocks at 5.79%, 9.21%, 10.54%, 11.69%, and 13.59%.
IJR is 8.10% more exposed to the Industrials sector than ITOT (17.31% vs 9.21%). IJR’s exposure to Financial Services and Technology stocks is 2.22% higher and 10.17% lower respectively (15.91% vs. 13.69% and 14.32% vs. 24.49%). In total, Communication Services, Energy, and Consumer Defensive also make up 8.24% less of the fund’s holdings compared to ITOT (10.60% vs. 18.84%).
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%.
| ITOT Holdings | Weight |
| Apple Inc | 5.07% |
| Microsoft Corp | 4.75% |
| Amazon.com Inc | 3.16% |
| Facebook Inc Class A | 1.89% |
| Alphabet Inc Class A | 1.79% |
| Alphabet Inc Class C | 1.71% |
| Tesla Inc | 1.17% |
| Berkshire Hathaway Inc Class B | 1.17% |
| NVIDIA Corp | 1.08% |
| JPMorgan Chase & Co | 1.02% |
ITOT’s Top Holdings are Apple Inc, Microsoft Corp, Amazon.com Inc, Facebook Inc Class A, and Alphabet Inc Class A at 5.07%, 4.75%, 3.16%, 1.89%, and 1.79%.
Alphabet Inc Class C (1.71%), Tesla Inc (1.17%), and Berkshire Hathaway Inc Class B (1.17%) have a slightly smaller but still significant weight. NVIDIA Corp and JPMorgan Chase & Co are also represented in the ITOT’s holdings at 1.08% and 1.02%.
Risk Analysis
| IJR | ITOT | |
| Mean Return | 1.21 | 1.27 |
| R-squared | 76.03 | 99.4 |
| Std. Deviation | 18.68 | 14.02 |
| Alpha | -3.7 | -0.54 |
| Beta | 1.2 | 1.03 |
| Sharpe Ratio | 0.74 | 1.04 |
| Treynor Ratio | 10.77 | 14.13 |
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 Alpha is -3.7 while IJR’s Mean Return is 1.21. Furthermore, the fund has a Treynor Ratio of 10.77 and a Standard Deviation of 18.68.
The iShares Core S&P Total U.S. Stock Market ETF (ITOT) has a Beta of 1.03 with a Mean Return of 1.27 and a Standard Deviation of 14.02. Its R-squared is 99.4 while ITOT’s Treynor Ratio is 14.13. Furthermore, the fund has a Sharpe Ratio of 1.04 and a Alpha of -0.54.
IJR’s Mean Return is 0.06 points lower than that of ITOT and its R-squared is 23.37 points lower. With a Standard Deviation of 18.68, IJR is slightly more volatile than ITOT. The Alpha and Beta of IJR are 3.16 points lower and 0.17 points higher than ITOT’s Alpha and Beta.
Performance
Annual Returns
| Year | IJR | ITOT |
| 2020 | 11.24% | 20.75% |
| 2019 | 22.79% | 30.87% |
| 2018 | -8.43% | -5.27% |
| 2017 | 13.2% | 21.23% |
| 2016 | 26.49% | 12.59% |
| 2015 | -2.0% | 0.96% |
| 2014 | 5.67% | 13.01% |
| 2013 | 41.36% | 32.67% |
| 2012 | 16.28% | 15.98% |
| 2011 | 0.9% | 1.55% |
| 2010 | 26.14% | 16.15% |
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 ITOT, returning 32.67% on an annual basis. The poorest year for ITOT in the last ten years was 2018, with a yield of -5.27%. Most years the iShares Core S&P Total U.S. Stock Market ETF has given investors modest returns, such as in 2014, 2012, and 2010, when gains were 13.01%, 15.98%, and 16.15% respectively.
Portfolio Growth
| Fund | Initial Balance | Final Balance | CAGR |
| IJR | $10,000 | $38,800 | 13.97% |
| ITOT | $10,000 | $42,310 | 14.59% |
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 ITOT, the end total would have been $42,310. This equates to a $32,310 profit over 11 years and a compound annual growth rate (CAGR) of 14.59%.
IJR’s CAGR is 0.62 percentage points lower than that of ITOT and as a result, would have yielded $3,510 less on a $10,000 investment. Thus, IJR performed worse than ITOT by 0.62% annually.
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