IJR vs. SCHG: What’s The Difference?

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

The expense ratio of IJR is 0.02 percentage points higher than SCHG’s (0.06% vs. 0.04%). IJR also has a higher exposure to the industrials sector and a higher standard deviation. Overall, IJR has provided lower returns than SCHG over the past ten years.

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

Summary

IJR SCHG
Name iShares Core S&P Small-Cap ETF Schwab U.S. Large-Cap Growth ETF
Category Small Blend Large Growth
Issuer iShares Schwab ETFs
AUM 68.64B 15.16B
Avg. Return 13.97% 17.81%
Div. Yield 0.96% 0.43%
Expense Ratio 0.06% 0.04%

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 Schwab U.S. Large-Cap Growth ETF (SCHG) is a Large Growth fund that is issued by Schwab ETFs. It currently has 15.16B total assets under management and has yielded an average annual return of 17.81% over the past 10 years. The fund has a dividend yield of 0.43% with an expense ratio of 0.04%.

IJR’s dividend yield is 0.53% higher than that of SCHG (0.96% vs. 0.43%). Also, IJR yielded on average 3.84% less per year over the past decade (13.97% vs. 17.81%). The expense ratio of IJR is 0.02 percentage points higher than SCHG’s (0.06% vs. 0.04%).

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Fund Composition

Industry Exposure

IJR vs. SCHG - Industry Exposure

IJR SCHG
Technology 14.32% 39.21%
Industrials 17.31% 3.01%
Energy 4.0% 0.2%
Communication Services 2.59% 17.07%
Utilities 1.8% 0.0%
Healthcare 11.55% 12.05%
Consumer Defensive 4.01% 2.15%
Real Estate 9.55% 1.64%
Financial Services 15.91% 7.98%
Consumer Cyclical 13.61% 15.01%
Basic Materials 5.34% 1.68%

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 Schwab U.S. Large-Cap Growth ETF (SCHG) has the most exposure to the Technology sector at 39.21%. This is followed by Communication Services and Consumer Cyclical at 17.07% and 15.01% respectively. Energy (0.2%), Real Estate (1.64%), and Basic Materials (1.68%) only make up 3.52% of the fund’s total assets.

SCHG’s mid-section with moderate exposure is comprised of Consumer Defensive, Industrials, Financial Services, Healthcare, and Consumer Cyclical stocks at 2.15%, 3.01%, 7.98%, 12.05%, and 15.01%.

IJR is 14.30% more exposed to the Industrials sector than SCHG (17.31% vs 3.01%). IJR’s exposure to Financial Services and Technology stocks is 7.93% higher and 24.89% lower respectively (15.91% vs. 7.98% and 14.32% vs. 39.21%). In total, Communication Services, Energy, and Consumer Defensive also make up 8.82% less of the fund’s holdings compared to SCHG (10.60% vs. 19.42%).

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%.

SCHG - Holdings

SCHG Holdings Weight
Apple Inc 11.49%
Microsoft Corp 10.91%
Amazon.com Inc 7.89%
Facebook Inc A 4.45%
Alphabet Inc A 3.93%
Alphabet Inc Class C 3.82%
Tesla Inc 2.8%
NVIDIA Corp 2.67%
Visa Inc Class A 2.12%
UnitedHealth Group Inc 2.02%

SCHG’s Top Holdings are Apple Inc, Microsoft Corp, Amazon.com Inc, Facebook Inc A, and Alphabet Inc A at 11.49%, 10.91%, 7.89%, 4.45%, and 3.93%.

Alphabet Inc Class C (3.82%), Tesla Inc (2.8%), and NVIDIA Corp (2.67%) have a slightly smaller but still significant weight. Visa Inc Class A and UnitedHealth Group Inc are also represented in the SCHG’s holdings at 2.12% and 2.02%.

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Risk Analysis

IJR SCHG
Mean Return 1.21 1.46
R-squared 76.03 92.92
Std. Deviation 18.68 14.78
Alpha -3.7 1.97
Beta 1.2 1.05
Sharpe Ratio 0.74 1.14
Treynor Ratio 10.77 16.3

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 Beta of 1.2. Its Sharpe Ratio is 0.74 while IJR’s Alpha is -3.7. Furthermore, the fund has a R-squared of 76.03 and a Standard Deviation of 18.68.

The Schwab U.S. Large-Cap Growth ETF (SCHG) has a Sharpe Ratio of 1.14 with a R-squared of 92.92 and a Alpha of 1.97. Its Standard Deviation is 14.78 while SCHG’s Mean Return is 1.46. Furthermore, the fund has a Treynor Ratio of 16.3 and a Beta of 1.05.

IJR’s Mean Return is 0.25 points lower than that of SCHG and its R-squared is 16.89 points lower. With a Standard Deviation of 18.68, IJR is slightly more volatile than SCHG. The Alpha and Beta of IJR are 5.67 points lower and 0.15 points higher than SCHG’s Alpha and Beta.

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Performance

Annual Returns

IJR vs. SCHG - Annual Returns

Year IJR SCHG
2020 11.24% 39.13%
2019 22.79% 36.21%
2018 -8.43% -1.35%
2017 13.2% 28.04%
2016 26.49% 6.76%
2015 -2.0% 3.26%
2014 5.67% 15.74%
2013 41.36% 33.96%
2012 16.28% 17.02%
2011 0.9% -0.67%
2010 26.14% 16.83%

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 2020 was the strongest year for SCHG, returning 39.13% on an annual basis. The poorest year for SCHG in the last ten years was 2018, with a yield of -1.35%. Most years the Schwab U.S. Large-Cap Growth ETF has given investors modest returns, such as in 2014, 2010, and 2012, when gains were 15.74%, 16.83%, and 17.02% respectively.

Portfolio Growth

IJR vs. SCHG - Portfolio Growth

Fund Initial Balance Final Balance CAGR
IJR $10,000 $30,759 13.97%
SCHG $10,000 $47,556 17.81%

A $10,000 investment in IJR would have resulted in a final balance of $30,759. This is a profit of $20,759 over 10 years and amounts to a compound annual growth rate (CAGR) of 13.97%.

With a $10,000 investment in SCHG, the end total would have been $47,556. This equates to a $37,556 profit over 10 years and a compound annual growth rate (CAGR) of 17.81%.

IJR’s CAGR is 3.84 percentage points lower than that of SCHG and as a result, would have yielded $16,797 less on a $10,000 investment. Thus, IJR performed worse than SCHG by 3.84% annually.


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