The iShares Core S&P Small-Cap ETF (IJR) and the iShares MBS ETF (MBB) are both among the Top 100 ETFs. IJR is a iShares Small Blend fund and MBB is a iShares Intermediate Government fund. So, what’s the difference between IJR and MBB? And which fund is better?
IJR and MBB have the same expense ratio: 0.06%. IJR also has a high exposure to the industrials sector while MBB is mostly comprised of AAA bonds. Overall, IJR has provided higher returns than MBB over the past ten years.
In this article, we’ll compare IJR vs. MBB. We’ll look at performance and risk metrics, as well as at their holdings and annual returns. Moreover, I’ll also discuss IJR’s and MBB’s fund composition, industry exposure, and portfolio growth and examine how these affect their overall returns.
|Name||iShares Core S&P Small-Cap ETF||iShares MBS ETF|
|Category||Small Blend||Intermediate Government|
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 MBS ETF (MBB) is a Intermediate Government fund that is issued by iShares. It currently has 25.69B total assets under management and has yielded an average annual return of 3.08% over the past 10 years. The fund has a dividend yield of 1.88% with an expense ratio of 0.06%.
IJR’s dividend yield is 0.92% lower than that of MBB (0.96% vs. 1.88%). Also, IJR yielded on average 10.89% more per year over the past decade (13.97% vs. 3.08%). IJR and MBB have the same expense ratio: 0.06%.
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|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%.
|MBB Bond Sectors||Weight|
MBB’s Top Bond Sectors are ratings of AAA, Others, Below B, B, and BB at 99.51%, 0.49%, 0.0%, 0.0%, and 0.0%. The fund is less weighted towards BBB (0.0%), A (0.0%), and AA (0.0%) rated bonds.
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The iShares Core S&P Small-Cap ETF (IJR) has a Standard Deviation of 18.68 with a Alpha of -3.7 and a Beta of 1.2. Its Mean Return is 1.21 while IJR’s R-squared is 76.03. Furthermore, the fund has a Treynor Ratio of 10.77 and a Sharpe Ratio of 0.74.
The iShares MBS ETF (MBB) has a R-squared of 74.38 with a Standard Deviation of 2.12 and a Mean Return of 0.2. Its Treynor Ratio is 3.02 while MBB’s Beta is 0.6. Furthermore, the fund has a Alpha of 0.14 and a Sharpe Ratio of 0.87.
IJR’s Mean Return is 1.01 points higher than that of MBB and its R-squared is 1.65 points higher. With a Standard Deviation of 18.68, IJR is slightly more volatile than MBB. The Alpha and Beta of IJR are 3.84 points lower and 0.60 points higher than MBB’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 2019 was the strongest year for MBB, returning 6.27% on an annual basis. The poorest year for MBB in the last ten years was 2013, with a yield of -1.92%. Most years the iShares MBS ETF has given investors modest returns, such as in 2012, 2017, and 2020, when gains were 2.23%, 2.37%, and 4.03% 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 MBB, the end total would have been $13,906. This equates to a $3,906 profit over 11 years and a compound annual growth rate (CAGR) of 3.08%.
IJR’s CAGR is 10.89 percentage points higher than that of MBB and as a result, would have yielded $24,894 more on a $10,000 investment. Thus, IJR outperformed MBB by 10.89% annually.
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