The iShares Core S&P Small-Cap ETF (IJR) and the iShares Russell 2000 ETF (IWM) are both among the Top 100 ETFs. IJR is a iShares Small Blend fund and IWM is a iShares Small Blend fund. So, what’s the difference between IJR and IWM? And which fund is better?
The expense ratio of IJR is 0.13 percentage points lower than IWM’s (0.06% vs. 0.19%). IJR also has a higher exposure to the industrials sector and a lower standard deviation. Overall, IJR has provided higher returns than IWM over the past ten years.
In this article, we’ll compare IJR vs. IWM. We’ll look at risk metrics and fund composition, as well as at their performance and holdings. Moreover, I’ll also discuss IJR’s and IWM’s portfolio growth, industry exposure, and annual returns and examine how these affect their overall returns.
|Name||iShares Core S&P Small-Cap ETF||iShares Russell 2000 ETF|
|Category||Small Blend||Small Blend|
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 2000 ETF (IWM) is a Small Blend fund that is issued by iShares. It currently has 66.48B total assets under management and has yielded an average annual return of 13.52% over the past 10 years. The fund has a dividend yield of 0.86% with an expense ratio of 0.19%.
IJR’s dividend yield is 0.10% higher than that of IWM (0.96% vs. 0.86%). Also, IJR yielded on average 0.45% more per year over the past decade (13.97% vs. 13.52%). The expense ratio of IJR is 0.13 percentage points lower than IWM’s (0.06% vs. 0.19%).
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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 2000 ETF (IWM) has the most exposure to the Healthcare sector at 20.3%. This is followed by Industrials and Technology at 14.78% and 14.21% respectively. Consumer Defensive (3.65%), Basic Materials (3.74%), and Energy (3.74%) only make up 11.13% of the fund’s total assets.
IWM’s mid-section with moderate exposure is comprised of Communication Services, Real Estate, Consumer Cyclical, Financial Services, and Technology stocks at 3.79%, 8.59%, 10.99%, 13.76%, and 14.21%.
IJR is 2.53% more exposed to the Industrials sector than IWM (17.31% vs 14.78%). IJR’s exposure to Financial Services and Technology stocks is 2.15% higher and 0.11% higher respectively (15.91% vs. 13.76% and 14.32% vs. 14.21%). In total, Communication Services, Energy, and Consumer Defensive also make up 0.58% less of the fund’s holdings compared to IWM (10.60% vs. 11.18%).
|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%.
|AMC Entertainment Holdings Inc Class A||0.52%|
|Intellia Therapeutics Inc||0.33%|
|BlackRock Cash Funds Treasury SL Agency||0.29%|
|Tenet Healthcare Corp||0.26%|
|Lattice Semiconductor Corp||0.26%|
|Tetra Tech Inc||0.25%|
|EastGroup Properties Inc||0.24%|
|Arrowhead Pharmaceuticals Inc||0.24%|
IWM’s Top Holdings are AMC Entertainment Holdings Inc Class A, Intellia Therapeutics Inc, Crocs Inc, BlackRock Cash Funds Treasury SL Agency, and Tenet Healthcare Corp at 0.52%, 0.33%, 0.3%, 0.29%, and 0.26%.
Lattice Semiconductor Corp (0.26%), Tetra Tech Inc (0.25%), and II-VI Inc (0.25%) have a slightly smaller but still significant weight. EastGroup Properties Inc and Arrowhead Pharmaceuticals Inc are also represented in the IWM’s holdings at 0.24% and 0.24%.
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The iShares Core S&P Small-Cap ETF (IJR) has a Beta of 1.2 with a Standard Deviation of 18.68 and a R-squared of 76.03. Its Alpha is -3.7 while IJR’s Sharpe Ratio is 0.74. Furthermore, the fund has a Treynor Ratio of 10.77 and a Mean Return of 1.21.
The iShares Russell 2000 ETF (IWM) has a Beta of 1.23 with a Treynor Ratio of 9.56 and a R-squared of 77.73. Its Standard Deviation is 18.87 while IWM’s Sharpe Ratio is 0.68. Furthermore, the fund has a Mean Return of 1.12 and a Alpha of -5.12.
IJR’s Mean Return is 0.09 points higher than that of IWM and its R-squared is 1.70 points lower. With a Standard Deviation of 18.68, IJR is slightly less volatile than IWM. The Alpha and Beta of IJR are 1.42 points higher and 0.03 points lower than IWM’s Alpha and Beta.
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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 IWM, returning 38.85% on an annual basis. The poorest year for IWM in the last ten years was 2018, with a yield of -11.02%. Most years the iShares Russell 2000 ETF has given investors modest returns, such as in 2017, 2012, and 2020, when gains were 14.66%, 16.39%, and 19.89% respectively.
|Fund||Initial Balance||Final Balance||CAGR|
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 IWM, the end total would have been $36,686. This equates to a $26,686 profit over 11 years and a compound annual growth rate (CAGR) of 13.52%.
IJR’s CAGR is 0.45 percentage points higher than that of IWM and as a result, would have yielded $2,114 more on a $10,000 investment. Thus, IJR outperformed IWM by 0.45% annually.
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