IJR vs. IWN: What’s The Difference?

The iShares Core S&P Small-Cap ETF (IJR) and the iShares Russell 2000 Value ETF (IWN) are both among the Top 100 ETFs. IJR is a iShares Small Blend fund and IWN is a iShares Small Value fund. So, what’s the difference between IJR and IWN? And which fund is better?

The expense ratio of IJR is 0.18 percentage points lower than IWN’s (0.06% vs. 0.24%). IJR also has a higher exposure to the industrials sector and a lower standard deviation. Overall, IJR has provided higher returns than IWN over the past ten years.

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

Summary

IJR IWN
Name iShares Core S&P Small-Cap ETF iShares Russell 2000 Value ETF
Category Small Blend Small Value
Issuer iShares iShares
AUM 68.64B 15.48B
Avg. Return 13.97% 10.96%
Div. Yield 0.96% 1.26%
Expense Ratio 0.06% 0.24%

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 Value ETF (IWN) is a Small Value fund that is issued by iShares. It currently has 15.48B total assets under management and has yielded an average annual return of 10.96% over the past 10 years. The fund has a dividend yield of 1.26% with an expense ratio of 0.24%.

IJR’s dividend yield is 0.30% lower than that of IWN (0.96% vs. 1.26%). Also, IJR yielded on average 3.01% more per year over the past decade (13.97% vs. 10.96%). The expense ratio of IJR is 0.18 percentage points lower than IWN’s (0.06% vs. 0.24%).

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Fund Composition

Industry Exposure

IJR vs. IWN - Industry Exposure

IJR IWN
Technology 14.32% 6.02%
Industrials 17.31% 14.58%
Energy 4.0% 5.84%
Communication Services 2.59% 4.17%
Utilities 1.8% 4.69%
Healthcare 11.55% 10.94%
Consumer Defensive 4.01% 3.77%
Real Estate 9.55% 14.36%
Financial Services 15.91% 22.97%
Consumer Cyclical 13.61% 8.39%
Basic Materials 5.34% 4.29%

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 Value ETF (IWN) has the most exposure to the Financial Services sector at 22.97%. This is followed by Industrials and Real Estate at 14.58% and 14.36% respectively. Communication Services (4.17%), Basic Materials (4.29%), and Utilities (4.69%) only make up 13.15% of the fund’s total assets.

IWN’s mid-section with moderate exposure is comprised of Energy, Technology, Consumer Cyclical, Healthcare, and Real Estate stocks at 5.84%, 6.02%, 8.39%, 10.94%, and 14.36%.

IJR is 2.73% more exposed to the Industrials sector than IWN (17.31% vs 14.58%). IJR’s exposure to Financial Services and Technology stocks is 7.06% lower and 8.30% higher respectively (15.91% vs. 22.97% and 14.32% vs. 6.02%). In total, Communication Services, Energy, and Consumer Defensive also make up 3.18% less of the fund’s holdings compared to IWN (10.60% vs. 13.78%).

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%.

IWN - Holdings

IWN Holdings Weight
AMC Entertainment Holdings Inc Class A 1.06%
Tenet Healthcare Corp 0.47%
Stag Industrial Inc 0.47%
Ovintiv Inc 0.45%
EMCOR Group Inc 0.42%
Valley National Bancorp 0.37%
Chesapeake Energy Corp Ordinary Shares – New 0.37%
Agree Realty Corp 0.36%
Macy’s Inc 0.35%
Essent Group Ltd 0.35%

IWN’s Top Holdings are AMC Entertainment Holdings Inc Class A, Tenet Healthcare Corp, Stag Industrial Inc, Ovintiv Inc, and EMCOR Group Inc at 1.06%, 0.47%, 0.47%, 0.45%, and 0.42%.

Valley National Bancorp (0.37%), Chesapeake Energy Corp Ordinary Shares – New (0.37%), and Agree Realty Corp (0.36%) have a slightly smaller but still significant weight. Macy’s Inc and Essent Group Ltd are also represented in the IWN’s holdings at 0.35% and 0.35%.

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Risk Analysis

IJR IWN
Mean Return 1.21 1.01
R-squared 76.03 72.64
Std. Deviation 18.68 19.28
Alpha -3.7 -6.32
Beta 1.2 1.21
Sharpe Ratio 0.74 0.59
Treynor Ratio 10.77 8.3

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

The iShares Russell 2000 Value ETF (IWN) has a Sharpe Ratio of 0.59 with a Beta of 1.21 and a Mean Return of 1.01. Its R-squared is 72.64 while IWN’s Treynor Ratio is 8.3. Furthermore, the fund has a Standard Deviation of 19.28 and a Alpha of -6.32.

IJR’s Mean Return is 0.20 points higher than that of IWN and its R-squared is 3.39 points higher. With a Standard Deviation of 18.68, IJR is slightly less volatile than IWN. The Alpha and Beta of IJR are 2.62 points higher and 0.01 points lower than IWN’s Alpha and Beta.

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Performance

Annual Returns

IJR vs. IWN - Annual Returns

Year IJR IWN
2020 11.24% 4.5%
2019 22.79% 22.17%
2018 -8.43% -12.94%
2017 13.2% 7.73%
2016 26.49% 31.64%
2015 -2.0% -7.53%
2014 5.67% 4.13%
2013 41.36% 34.3%
2012 16.28% 17.92%
2011 0.9% -5.64%
2010 26.14% 24.29%

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 IWN, returning 34.3% on an annual basis. The poorest year for IWN in the last ten years was 2018, with a yield of -12.94%. Most years the iShares Russell 2000 Value ETF has given investors modest returns, such as in 2020, 2017, and 2012, when gains were 4.5%, 7.73%, and 17.92% respectively.

Portfolio Growth

IJR vs. IWN - Portfolio Growth

Fund Initial Balance Final Balance CAGR
IJR $10,000 $38,800 13.97%
IWN $10,000 $28,189 10.96%

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 IWN, the end total would have been $28,189. This equates to a $18,189 profit over 11 years and a compound annual growth rate (CAGR) of 10.96%.

IJR’s CAGR is 3.01 percentage points higher than that of IWN and as a result, would have yielded $10,611 more on a $10,000 investment. Thus, IJR outperformed IWN by 3.01% annually.


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