IJR vs. IWS: What’s The Difference?

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

The expense ratio of IJR is 0.17 percentage points lower than IWS’s (0.06% vs. 0.23%). IJR also has a higher exposure to the industrials sector and a higher standard deviation. Overall, IJR has provided higher returns than IWS over the past ten years.

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

Summary

IJR IWS
Name iShares Core S&P Small-Cap ETF iShares Russell Mid-Cap Value ETF
Category Small Blend Mid-Cap Value
Issuer iShares iShares
AUM 68.64B 14.24B
Avg. Return 13.97% 12.35%
Div. Yield 0.96% 1.34%
Expense Ratio 0.06% 0.23%

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 Value ETF (IWS) is a Mid-Cap Value fund that is issued by iShares. It currently has 14.24B total assets under management and has yielded an average annual return of 12.35% over the past 10 years. The fund has a dividend yield of 1.34% with an expense ratio of 0.23%.

IJR’s dividend yield is 0.38% lower than that of IWS (0.96% vs. 1.34%). Also, IJR yielded on average 1.62% more per year over the past decade (13.97% vs. 12.35%). The expense ratio of IJR is 0.17 percentage points lower than IWS’s (0.06% vs. 0.23%).

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Fund Composition

Industry Exposure

IJR vs. IWS - Industry Exposure

IJR IWS
Technology 14.32% 11.39%
Industrials 17.31% 14.6%
Energy 4.0% 4.71%
Communication Services 2.59% 4.08%
Utilities 1.8% 6.97%
Healthcare 11.55% 8.56%
Consumer Defensive 4.01% 4.76%
Real Estate 9.55% 11.71%
Financial Services 15.91% 15.75%
Consumer Cyclical 13.61% 12.07%
Basic Materials 5.34% 5.4%

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 Value ETF (IWS) has the most exposure to the Financial Services sector at 15.75%. This is followed by Industrials and Consumer Cyclical at 14.6% and 12.07% respectively. Energy (4.71%), Consumer Defensive (4.76%), and Basic Materials (5.4%) only make up 14.87% of the fund’s total assets.

IWS’s mid-section with moderate exposure is comprised of Utilities, Healthcare, Technology, Real Estate, and Consumer Cyclical stocks at 6.97%, 8.56%, 11.39%, 11.71%, and 12.07%.

IJR is 2.71% more exposed to the Industrials sector than IWS (17.31% vs 14.6%). IJR’s exposure to Financial Services and Technology stocks is 0.16% higher and 2.93% higher respectively (15.91% vs. 15.75% and 14.32% vs. 11.39%). In total, Communication Services, Energy, and Consumer Defensive also make up 2.95% less of the fund’s holdings compared to IWS (10.60% vs. 13.55%).

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%.

IWS - Holdings

IWS Holdings Weight
Twitter Inc 0.69%
Marvell Technology Inc 0.69%
IHS Markit Ltd 0.62%
Prudential Financial Inc 0.56%
Otis Worldwide Corp Ordinary Shares 0.54%
International Flavors & Fragrances Inc 0.53%
Xcel Energy Inc 0.52%
Motorola Solutions Inc 0.52%
Aptiv PLC 0.52%
Aflac Inc 0.52%

IWS’s Top Holdings are Twitter Inc, Marvell Technology Inc, IHS Markit Ltd, Prudential Financial Inc, and Otis Worldwide Corp Ordinary Shares at 0.69%, 0.69%, 0.62%, 0.56%, and 0.54%.

International Flavors & Fragrances Inc (0.53%), Xcel Energy Inc (0.52%), and Motorola Solutions Inc (0.52%) have a slightly smaller but still significant weight. Aptiv PLC and Aflac Inc are also represented in the IWS’s holdings at 0.52% and 0.52%.

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Risk Analysis

IJR IWS
Mean Return 1.21 1.06
R-squared 76.03 87.04
Std. Deviation 18.68 16.03
Alpha -3.7 -4.11
Beta 1.2 1.1
Sharpe Ratio 0.74 0.75
Treynor Ratio 10.77 10.3

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

The iShares Russell Mid-Cap Value ETF (IWS) has a Alpha of -4.11 with a Sharpe Ratio of 0.75 and a Beta of 1.1. Its R-squared is 87.04 while IWS’s Treynor Ratio is 10.3. Furthermore, the fund has a Mean Return of 1.06 and a Standard Deviation of 16.03.

IJR’s Mean Return is 0.15 points higher than that of IWS and its R-squared is 11.01 points lower. With a Standard Deviation of 18.68, IJR is slightly more volatile than IWS. The Alpha and Beta of IJR are 0.41 points higher and 0.10 points higher than IWS’s Alpha and Beta.

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Performance

Annual Returns

IJR vs. IWS - Annual Returns

Year IJR IWS
2020 11.24% 4.76%
2019 22.79% 26.78%
2018 -8.43% -12.36%
2017 13.2% 13.1%
2016 26.49% 19.69%
2015 -2.0% -4.93%
2014 5.67% 14.49%
2013 41.36% 33.11%
2012 16.28% 18.27%
2011 0.9% -1.55%
2010 26.14% 24.46%

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 IWS, returning 33.11% on an annual basis. The poorest year for IWS in the last ten years was 2018, with a yield of -12.36%. Most years the iShares Russell Mid-Cap Value ETF has given investors modest returns, such as in 2017, 2014, and 2012, when gains were 13.1%, 14.49%, and 18.27% respectively.

Portfolio Growth

IJR vs. IWS - Portfolio Growth

Fund Initial Balance Final Balance CAGR
IJR $10,000 $38,800 13.97%
IWS $10,000 $33,083 12.35%

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 IWS, the end total would have been $33,083. This equates to a $23,083 profit over 11 years and a compound annual growth rate (CAGR) of 12.35%.

IJR’s CAGR is 1.62 percentage points higher than that of IWS and as a result, would have yielded $5,717 more on a $10,000 investment. Thus, IJR outperformed IWS by 1.62% annually.


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