IJR vs. SCHP: What’s The Difference?

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

The expense ratio of IJR is 0.01 percentage points higher than SCHP’s (0.06% vs. 0.05%). IJR also has a high exposure to the industrials sector while SCHP is mostly comprised of AAA bonds. Overall, IJR has provided higher returns than SCHP over the past ten years.

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

Summary

IJR SCHP
Name iShares Core S&P Small-Cap ETF Schwab U.S. TIPS ETF
Category Small Blend Inflation-Protected Bond
Issuer iShares Schwab ETFs
AUM 68.64B 18.41B
Avg. Return 13.97% 3.92%
Div. Yield 0.96% 1.97%
Expense Ratio 0.06% 0.05%

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. TIPS ETF (SCHP) is a Inflation-Protected Bond fund that is issued by Schwab ETFs. It currently has 18.41B total assets under management and has yielded an average annual return of 3.92% over the past 10 years. The fund has a dividend yield of 1.97% with an expense ratio of 0.05%.

IJR’s dividend yield is 1.01% lower than that of SCHP (0.96% vs. 1.97%). Also, IJR yielded on average 10.05% more per year over the past decade (13.97% vs. 3.92%). The expense ratio of IJR is 0.01 percentage points higher than SCHP’s (0.06% vs. 0.05%).

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Fund Composition

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%.

SCHP - Holdings

SCHP Bond Sectors Weight
AAA 100.0%
Others 0.0%
Below B 0.0%
B 0.0%
BB 0.0%
BBB 0.0%
A 0.0%
AA 0.0%
US Government 0.0%

SCHP’s Top Bond Sectors are ratings of AAA, Others, Below B, B, and BB at 100.0%, 0.0%, 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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Risk Analysis

IJR SCHP
Mean Return 1.21 0.28
R-squared 76.03 66.16
Std. Deviation 18.68 4.32
Alpha -3.7 -0.5
Beta 1.2 1.17
Sharpe Ratio 0.74 0.64
Treynor Ratio 10.77 2.31

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

The Schwab U.S. TIPS ETF (SCHP) has a Beta of 1.17 with a Alpha of -0.5 and a R-squared of 66.16. Its Sharpe Ratio is 0.64 while SCHP’s Treynor Ratio is 2.31. Furthermore, the fund has a Standard Deviation of 4.32 and a Mean Return of 0.28.

IJR’s Mean Return is 0.93 points higher than that of SCHP and its R-squared is 9.87 points higher. With a Standard Deviation of 18.68, IJR is slightly more volatile than SCHP. The Alpha and Beta of IJR are 3.20 points lower and 0.03 points higher than SCHP’s Alpha and Beta.

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Performance

Annual Returns

IJR vs. SCHP - Annual Returns

Year IJR SCHP
2020 11.24% 10.94%
2019 22.79% 8.36%
2018 -8.43% -1.31%
2017 13.2% 2.95%
2016 26.49% 4.6%
2015 -2.0% -1.5%
2014 5.67% 3.56%
2013 41.36% -8.66%
2012 16.28% 6.83%
2011 0.9% 13.38%
2010 26.14% 0.0%

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 2011 was the strongest year for SCHP, returning 13.38% on an annual basis. The poorest year for SCHP in the last ten years was 2013, with a yield of -8.66%. Most years the Schwab U.S. TIPS ETF has given investors modest returns, such as in 2017, 2014, and 2016, when gains were 2.95%, 3.56%, and 4.6% respectively.

Portfolio Growth

IJR vs. SCHP - Portfolio Growth

Fund Initial Balance Final Balance CAGR
IJR $10,000 $30,759 13.97%
SCHP $10,000 $14,418 3.92%

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 SCHP, the end total would have been $14,418. This equates to a $4,418 profit over 10 years and a compound annual growth rate (CAGR) of 3.92%.

IJR’s CAGR is 10.05 percentage points higher than that of SCHP and as a result, would have yielded $16,341 more on a $10,000 investment. Thus, IJR outperformed SCHP by 10.05% annually.


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