The iShares Core S&P Small-Cap ETF (IJR) and the iShares Russell Mid-Cap ETF (IWR) are both among the Top 100 ETFs. IJR is a iShares Small Blend fund and IWR is a iShares Mid-Cap Blend fund. So, what’s the difference between IJR and IWR? And which fund is better?
The expense ratio of IJR is 0.13 percentage points lower than IWR’s (0.06% vs. 0.19%). IJR also has a higher exposure to the industrials sector and a higher standard deviation. Overall, IJR has provided lower returns than IWR over the past ten years.
In this article, we’ll compare IJR vs. IWR. We’ll look at holdings and risk metrics, as well as at their industry exposure and annual returns. Moreover, I’ll also discuss IJR’s and IWR’s portfolio growth, performance, and fund composition and examine how these affect their overall returns.
|Name||iShares Core S&P Small-Cap ETF||iShares Russell Mid-Cap ETF|
|Category||Small Blend||Mid-Cap 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 Mid-Cap ETF (IWR) is a Mid-Cap Blend fund that is issued by iShares. It currently has 29.84B total assets under management and has yielded an average annual return of 14.15% over the past 10 years. The fund has a dividend yield of 0.99% with an expense ratio of 0.19%.
IJR’s dividend yield is 0.03% lower than that of IWR (0.96% vs. 0.99%). Also, IJR yielded on average 0.18% less per year over the past decade (13.97% vs. 14.15%). The expense ratio of IJR is 0.13 percentage points lower than IWR’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 Mid-Cap ETF (IWR) has the most exposure to the Technology sector at 19.67%. This is followed by Industrials and Consumer Cyclical at 14.54% and 13.59% respectively. Consumer Defensive (3.82%), Basic Materials (4.1%), and Utilities (4.46%) only make up 12.38% of the fund’s total assets.
IWR’s mid-section with moderate exposure is comprised of Communication Services, Real Estate, Financial Services, Healthcare, and Consumer Cyclical stocks at 4.64%, 8.31%, 11.64%, 11.76%, and 13.59%.
IJR is 2.77% more exposed to the Industrials sector than IWR (17.31% vs 14.54%). IJR’s exposure to Financial Services and Technology stocks is 4.27% higher and 5.35% lower respectively (15.91% vs. 11.64% and 14.32% vs. 19.67%). In total, Communication Services, Energy, and Consumer Defensive also make up 1.34% less of the fund’s holdings compared to IWR (10.60% vs. 11.94%).
|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%.
|IDEXX Laboratories Inc||0.51%|
|Chipotle Mexican Grill Inc||0.47%|
|Roku Inc Class A||0.44%|
|Marvell Technology Inc||0.44%|
|Trane Technologies PLC||0.43%|
|Carrier Global Corp Ordinary Shares||0.43%|
IWR’s Top Holdings are IDEXX Laboratories Inc, DocuSign Inc, Twitter Inc, Chipotle Mexican Grill Inc, and Roku Inc Class A at 0.51%, 0.51%, 0.48%, 0.47%, and 0.44%.
Marvell Technology Inc (0.44%), DexCom Inc (0.44%), and Trane Technologies PLC (0.43%) have a slightly smaller but still significant weight. MSCI Inc and Carrier Global Corp Ordinary Shares are also represented in the IWR’s holdings at 0.43% and 0.43%.
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The iShares Core S&P Small-Cap ETF (IJR) has a Sharpe Ratio of 0.74 with a R-squared of 76.03 and a Beta of 1.2. Its Alpha is -3.7 while IJR’s Mean Return is 1.21. Furthermore, the fund has a Treynor Ratio of 10.77 and a Standard Deviation of 18.68.
The iShares Russell Mid-Cap ETF (IWR) has a Beta of 1.11 with a Sharpe Ratio of 0.86 and a R-squared of 91.52. Its Treynor Ratio is 11.72 while IWR’s Alpha is -2.8. Furthermore, the fund has a Standard Deviation of 15.66 and a Mean Return of 1.17.
IJR’s Mean Return is 0.04 points higher than that of IWR and its R-squared is 15.49 points lower. With a Standard Deviation of 18.68, IJR is slightly more volatile than IWR. The Alpha and Beta of IJR are 0.90 points lower and 0.09 points higher than IWR’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 IWR, returning 34.5% on an annual basis. The poorest year for IWR in the last ten years was 2018, with a yield of -9.13%. Most years the iShares Russell Mid-Cap ETF has given investors modest returns, such as in 2016, 2020, and 2012, when gains were 13.58%, 16.91%, and 17.13% 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 IWR, the end total would have been $39,751. This equates to a $29,751 profit over 11 years and a compound annual growth rate (CAGR) of 14.15%.
IJR’s CAGR is 0.18 percentage points lower than that of IWR and as a result, would have yielded $951 less on a $10,000 investment. Thus, IJR performed worse than IWR by 0.18% annually.
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