IJR vs. IWB: What’s The Difference?

The iShares Core S&P Small-Cap ETF (IJR) and the iShares Russell 1000 ETF (IWB) are both among the Top 100 ETFs. IJR is a iShares Small Blend fund and IWB is a iShares Large Blend fund. So, what’s the difference between IJR and IWB? And which fund is better?

The expense ratio of IJR is 0.09 percentage points lower than IWB’s (0.06% vs. 0.15%). IJR also has a higher exposure to the industrials sector and a higher standard deviation. Overall, IJR has provided lower returns than IWB over the past ten years.

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

Summary

IJR IWB
Name iShares Core S&P Small-Cap ETF iShares Russell 1000 ETF
Category Small Blend Large Blend
Issuer iShares iShares
AUM 68.64B 30.54B
Avg. Return 13.97% 14.64%
Div. Yield 0.96% 1.14%
Expense Ratio 0.06% 0.15%

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 Russell 1000 ETF (IWB) is a Large Blend fund that is issued by iShares. It currently has 30.54B total assets under management and has yielded an average annual return of 14.64% over the past 10 years. The fund has a dividend yield of 1.14% with an expense ratio of 0.15%.

IJR’s dividend yield is 0.18% lower than that of IWB (0.96% vs. 1.14%). Also, IJR yielded on average 0.67% less per year over the past decade (13.97% vs. 14.64%). The expense ratio of IJR is 0.09 percentage points lower than IWB’s (0.06% vs. 0.15%).

Fund Composition

Industry Exposure

IJR vs. IWB - Industry Exposure

IJR IWB
Technology 14.32% 25.33%
Industrials 17.31% 8.88%
Energy 4.0% 2.44%
Communication Services 2.59% 10.83%
Utilities 1.8% 2.36%
Healthcare 11.55% 13.35%
Consumer Defensive 4.01% 5.97%
Real Estate 9.55% 3.34%
Financial Services 15.91% 13.64%
Consumer Cyclical 13.61% 11.85%
Basic Materials 5.34% 2.02%

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 Russell 1000 ETF (IWB) has the most exposure to the Technology sector at 25.33%. This is followed by Financial Services and Healthcare at 13.64% and 13.35% respectively. Utilities (2.36%), Energy (2.44%), and Real Estate (3.34%) only make up 8.14% of the fund’s total assets.

IWB’s mid-section with moderate exposure is comprised of Consumer Defensive, Industrials, Communication Services, Consumer Cyclical, and Healthcare stocks at 5.97%, 8.88%, 10.83%, 11.85%, and 13.35%.

IJR is 8.43% more exposed to the Industrials sector than IWB (17.31% vs 8.88%). IJR’s exposure to Financial Services and Technology stocks is 2.27% higher and 11.01% lower respectively (15.91% vs. 13.64% and 14.32% vs. 25.33%). In total, Communication Services, Energy, and Consumer Defensive also make up 8.64% less of the fund’s holdings compared to IWB (10.60% vs. 19.24%).

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%.

IWB - Holdings

IWB Holdings Weight
Apple Inc 5.45%
Microsoft Corp 5.11%
Amazon.com Inc 3.43%
Facebook Inc Class A 2.03%
Alphabet Inc Class A 1.93%
Alphabet Inc Class C 1.82%
Tesla Inc 1.27%
Berkshire Hathaway Inc Class B 1.24%
NVIDIA Corp 1.11%
JPMorgan Chase & Co 1.09%

IWB’s Top Holdings are Apple Inc, Microsoft Corp, Amazon.com Inc, Facebook Inc Class A, and Alphabet Inc Class A at 5.45%, 5.11%, 3.43%, 2.03%, and 1.93%.

Alphabet Inc Class C (1.82%), Tesla Inc (1.27%), and Berkshire Hathaway Inc Class B (1.24%) have a slightly smaller but still significant weight. NVIDIA Corp and JPMorgan Chase & Co are also represented in the IWB’s holdings at 1.11% and 1.09%.

Risk Analysis

IJR IWB
Mean Return 1.21 1.27
R-squared 76.03 99.73
Std. Deviation 18.68 13.87
Alpha -3.7 -0.38
Beta 1.2 1.02
Sharpe Ratio 0.74 1.05
Treynor Ratio 10.77 14.31

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

The iShares Russell 1000 ETF (IWB) has a R-squared of 99.73 with a Beta of 1.02 and a Sharpe Ratio of 1.05. Its Standard Deviation is 13.87 while IWB’s Mean Return is 1.27. Furthermore, the fund has a Alpha of -0.38 and a Treynor Ratio of 14.31.

IJR’s Mean Return is 0.06 points lower than that of IWB and its R-squared is 23.70 points lower. With a Standard Deviation of 18.68, IJR is slightly more volatile than IWB. The Alpha and Beta of IJR are 3.32 points lower and 0.18 points higher than IWB’s Alpha and Beta.

Performance

Annual Returns

IJR vs. IWB - Annual Returns

Year IJR IWB
2020 11.24% 20.8%
2019 22.79% 31.26%
2018 -8.43% -4.91%
2017 13.2% 21.53%
2016 26.49% 11.91%
2015 -2.0% 0.82%
2014 5.67% 13.08%
2013 41.36% 32.93%
2012 16.28% 16.27%
2011 0.9% 1.36%
2010 26.14% 15.94%

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 IWB, returning 32.93% on an annual basis. The poorest year for IWB in the last ten years was 2018, with a yield of -4.91%. Most years the iShares Russell 1000 ETF has given investors modest returns, such as in 2014, 2010, and 2012, when gains were 13.08%, 15.94%, and 16.27% respectively.

Portfolio Growth

IJR vs. IWB - Portfolio Growth

Fund Initial Balance Final Balance CAGR
IJR $10,000 $38,800 13.97%
IWB $10,000 $42,462 14.64%

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 IWB, the end total would have been $42,462. This equates to a $32,462 profit over 11 years and a compound annual growth rate (CAGR) of 14.64%.

IJR’s CAGR is 0.67 percentage points lower than that of IWB and as a result, would have yielded $3,662 less on a $10,000 investment. Thus, IJR performed worse than IWB by 0.67% annually.


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