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.
|Name||iShares Core S&P Small-Cap ETF||Schwab U.S. TIPS ETF|
|Category||Small Blend||Inflation-Protected Bond|
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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|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%.
|SCHP Bond Sectors||Weight|
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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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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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.
|Fund||Initial Balance||Final Balance||CAGR|
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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