IJR vs. IUSB: What’s The Difference?

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.

Summary

IJR IUSB
Name iShares Core S&P Small-Cap ETF iShares Core Total USD Bond Market ETF
Category Small Blend N/A
Issuer iShares iShares
AUM 68.64B 14.49B
Avg. Return 13.97% 4.13%
Div. Yield 0.96% 2.1%
Expense Ratio 0.06% 0.06%

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%.

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Fund Composition

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%.

IUSB - Holdings

IUSB Bond Sectors Weight
AAA 58.32%
BBB 16.98%
A 12.27%
BB 4.33%
AA 3.36%
B 2.8%
Others 1.01%
Below B 0.92%
US Government 0.0%

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.

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Risk Analysis

IJR IUSB
Mean Return 1.21 0
R-squared 76.03 0
Std. Deviation 18.68 0
Alpha -3.7 0
Beta 1.2 0
Sharpe Ratio 0.74 0
Treynor Ratio 10.77 0

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.

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Performance

Annual Returns

IJR vs. IUSB - Annual Returns

Year IJR IUSB
2020 11.24% 7.59%
2019 22.79% 9.26%
2018 -8.43% -0.38%
2017 13.2% 4.06%
2016 26.49% 3.78%
2015 -2.0% 0.46%
2014 5.67% 0.0%
2013 41.36% 0.0%
2012 16.28% 0.0%
2011 0.9% 0.0%
2010 26.14% 0.0%

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 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.

Portfolio Growth

IJR vs. IUSB - Portfolio Growth

Fund Initial Balance Final Balance CAGR
IJR $10,000 $17,551 13.97%
IUSB $10,000 $12,704 4.13%

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.


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