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.
FYI: Another great way to get exposure to the real estate sector is by investing in real estate debt. Groundfloor offers fantastic short-term, high-yield bonds that can add diversification to your portfolio!
|Name||iShares Core S&P Small-Cap ETF||iShares Russell Mid-Cap Value ETF|
|Category||Small Blend||Mid-Cap Value|
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%).
FYI: The best way I've found to invest is through M1 Finance. It's free and you even get an instant line of credit and 100$! Have a look here (link to M1 Finance).
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%).
|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%.
|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%|
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%.
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.
NOTE: The easiest way to add diversification to your portfolio is to invest in real estate through Fundrise. You can become private real estate investor without the burden of property management! Check it out here (link to Fundrise).
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.
|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 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.
Over the past years, I have discovered several tools and products that have helped me tremendously on my path to financial freedom:
P.S.: The links below are affiliate links, which means I receive a small commission at no extra cost to you when you sign up for one of the services. Thank you for your support!
1)Personal Capital is simply the best tool out there to track your net worth and plan for financial freedom. Just their retirement planner alone has become an invaluable tool to keep myself on track financially. Try it out, it's free!
2) Take a look at M1 Finance, my favorite broker. I love how easy it is to invest and maintain my portfolio with them. I can set up automatic transfers, rebalance my portfolio with one click and even borrow up to 35% of my assets at super low interest rates!
3) Fundrise is by far the best way I've found to invest in Real Estate. You can diversify your portfolio by investing in their eREITs or even allocate capital to individual properties (without the hassle of managing tenants!).
4) Groundfloor is another great way to get exposure to the real estate sector by investing in short-term, high-yield real estate debt. Current returns are >10% and you can get started with just $10.
5) If you are interested in startup investing, check out Mainvest. I've started allocating a small amount of assets to invest in and support small businesses. Return targets are between 10-25% and you can start with just $100!
To see all of my most up-to-date recommendations, check out the Recommended Tools section.