The iShares Core S&P Small-Cap ETF (IJR) and the iShares Core Total USD Bond Market ETF (IUSB) are both among the Top 100 ETFs. IJR is a iShares Small Blend fund and IUSB is a iShares N/A fund. So, what’s the difference between IJR and IUSB? And which fund is better?
IJR and IUSB have the same expense ratio: 0.06%. IJR also has a high exposure to the industrials sector while IUSB is mostly comprised of AAA bonds. Overall, IJR has provided higher returns than IUSB over the past ten years.
In this article, we’ll compare IJR vs. IUSB. We’ll look at fund composition and industry exposure, as well as at their risk metrics and performance. Moreover, I’ll also discuss IJR’s and IUSB’s holdings, portfolio growth, and annual returns and examine how these affect their overall returns.
|Name||iShares Core S&P Small-Cap ETF||iShares Core Total USD Bond Market ETF|
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 Total USD Bond Market ETF (IUSB) is a N/A fund that is issued by iShares. It currently has 14.49B total assets under management and has yielded an average annual return of 4.13% over the past 10 years. The fund has a dividend yield of 2.1% with an expense ratio of 0.06%.
IJR’s dividend yield is 1.14% lower than that of IUSB (0.96% vs. 2.1%). Also, IJR yielded on average 9.84% more per year over the past decade (13.97% vs. 4.13%). IJR and IUSB have the same expense ratio: 0.06%.
FYI: The best way I've found to invest in ETFs is through M1 Finance. It's free and you even get an instant line of credit! Have a look here (link to M1 Finance).
|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%.
|IUSB Bond Sectors||Weight|
IUSB’s Top Bond Sectors are ratings of AAA, BBB, A, BB, and AA at 58.32%, 16.98%, 12.27%, 4.33%, and 3.36%. The fund is less weighted towards B (2.8%), Others (1.01%), and Below B (0.92%) rated bonds.
NOTE: The easiest way to add diversification to your portfolio is to invest in real estate through Fundrise. You can become private real estate investor without the burden of property management! Check it out here (link to Fundrise).
The iShares Core S&P Small-Cap ETF (IJR) has a R-squared of 76.03 with a Mean Return of 1.21 and a Standard Deviation of 18.68. Its Alpha is -3.7 while IJR’s Sharpe Ratio is 0.74. Furthermore, the fund has a Beta of 1.2 and a Treynor Ratio of 10.77.
The iShares Core Total USD Bond Market ETF (IUSB) has a Sharpe Ratio of 0 with a Mean Return of 0 and a Standard Deviation of 0. Its Alpha is 0 while IUSB’s Beta is 0. Furthermore, the fund has a Treynor Ratio of 0 and a R-squared of 0.
IJR’s Mean Return is 1.21 points higher than that of IUSB and its R-squared is 76.03 points higher. With a Standard Deviation of 18.68, IJR is slightly more volatile than IUSB. The Alpha and Beta of IJR are 3.70 points lower and 1.20 points higher than IUSB’s Alpha and Beta.
FYI: Another great way to get exposure to the real estate sector is by investing in real estate debt. Groundfloor offers fantastic short-term, high-yield bonds that can add diversification to your portfolio!
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 IUSB, returning 9.26% on an annual basis. The poorest year for IUSB in the last ten years was 2018, with a yield of -0.38%. Most years the iShares Core Total USD Bond Market ETF has given investors modest returns, such as in 2011, 2010, and 2015, when gains were 0.0%, 0.0%, and 0.46% respectively.
|Fund||Initial Balance||Final Balance||CAGR|
A $10,000 investment in IJR would have resulted in a final balance of $17,551. This is a profit of $7,551 over 6 years and amounts to a compound annual growth rate (CAGR) of 13.97%.
With a $10,000 investment in IUSB, the end total would have been $12,704. This equates to a $2,704 profit over 6 years and a compound annual growth rate (CAGR) of 4.13%.
IJR’s CAGR is 9.84 percentage points higher than that of IUSB and as a result, would have yielded $4,847 more on a $10,000 investment. Thus, IJR outperformed IUSB by 9.84% annually.
Over the past years, I have discovered several tools and products that have helped me tremendously on my path to financial freedom:
P.S.: The links below are affiliate links, which means I receive a small commission at no extra cost to you when you sign up for one of the services. Thank you for your support!
1)Personal Capital is simply the best tool out there to track your net worth and plan for financial freedom. Just their retirement planner alone has become an invaluable tool to keep myself on track financially. Try it out, it's free!
2) Take a look at M1 Finance, my favorite broker. I love how easy it is to invest and maintain my portfolio with them. I can set up automatic transfers, rebalance my portfolio with one click and even borrow up to 35% of my assets at super low interest rates!
3) Fundrise is by far the best way I've found to invest in Real Estate. You can diversify your portfolio by investing in their eREITs or even allocate capital to individual properties (without the hassle of managing tenants!).
4) Groundfloor is another great way to get exposure to the real estate sector by investing in short-term, high-yield real estate debt. Current returns are >10% and you can get started with just $10.
5) If you are interested in startup investing, check out Mainvest. I've started allocating a small amount of assets to invest in and support small businesses. Return targets are between 10-25% and you can start with just $100!
To see all of my most up-to-date recommendations, check out the Recommended Tools section.