The iShares Core S&P Small-Cap ETF (IJR) and the SPDR S&P Dividend ETF (SDY) are both among the Top 100 ETFs. IJR is a iShares Small Blend fund and SDY is a SPDR State Street Global Advisors Large Value fund. So, what’s the difference between IJR and SDY? And which fund is better?
The expense ratio of IJR is 0.29 percentage points lower than SDY’s (0.06% vs. 0.35%). IJR also has a higher exposure to the industrials sector and a higher standard deviation. Overall, IJR has provided higher returns than SDY over the past ten years.
In this article, we’ll compare IJR vs. SDY. We’ll look at portfolio growth and holdings, as well as at their annual returns and industry exposure. Moreover, I’ll also discuss IJR’s and SDY’s fund composition, risk metrics, and performance and examine how these affect their overall returns.
Summary
| IJR | SDY | |
| Name | iShares Core S&P Small-Cap ETF | SPDR S&P Dividend ETF |
| Category | Small Blend | Large Value |
| Issuer | iShares | SPDR State Street Global Advisors |
| AUM | 68.64B | 19.67B |
| Avg. Return | 13.97% | 12.44% |
| Div. Yield | 0.96% | 2.65% |
| Expense Ratio | 0.06% | 0.35% |
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 SPDR S&P Dividend ETF (SDY) is a Large Value fund that is issued by SPDR State Street Global Advisors. It currently has 19.67B total assets under management and has yielded an average annual return of 12.44% over the past 10 years. The fund has a dividend yield of 2.65% with an expense ratio of 0.35%.
IJR’s dividend yield is 1.69% lower than that of SDY (0.96% vs. 2.65%). Also, IJR yielded on average 1.53% more per year over the past decade (13.97% vs. 12.44%). The expense ratio of IJR is 0.29 percentage points lower than SDY’s (0.06% vs. 0.35%).
Fund Composition
Industry Exposure
| IJR | SDY | |
| Technology | 14.32% | 2.0% |
| Industrials | 17.31% | 15.89% |
| Energy | 4.0% | 5.95% |
| Communication Services | 2.59% | 4.64% |
| Utilities | 1.8% | 12.14% |
| Healthcare | 11.55% | 7.35% |
| Consumer Defensive | 4.01% | 14.01% |
| Real Estate | 9.55% | 6.57% |
| Financial Services | 15.91% | 16.32% |
| Consumer Cyclical | 13.61% | 8.68% |
| Basic Materials | 5.34% | 6.45% |
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 SPDR S&P Dividend ETF (SDY) has the most exposure to the Financial Services sector at 16.32%. This is followed by Industrials and Consumer Defensive at 15.89% and 14.01% respectively. Communication Services (4.64%), Energy (5.95%), and Basic Materials (6.45%) only make up 17.04% of the fund’s total assets.
SDY’s mid-section with moderate exposure is comprised of Real Estate, Healthcare, Consumer Cyclical, Utilities, and Consumer Defensive stocks at 6.57%, 7.35%, 8.68%, 12.14%, and 14.01%.
IJR is 1.42% more exposed to the Industrials sector than SDY (17.31% vs 15.89%). IJR’s exposure to Financial Services and Technology stocks is 0.41% lower and 12.32% higher respectively (15.91% vs. 16.32% and 14.32% vs. 2.0%). In total, Communication Services, Energy, and Consumer Defensive also make up 14.00% less of the fund’s holdings compared to SDY (10.60% vs. 24.60%).
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%.
| SDY Holdings | Weight |
| Exxon Mobil Corp | 2.81% |
| AT&T Inc | 2.5% |
| South Jersey Industries Inc | 2.22% |
| Chevron Corp | 2.02% |
| International Business Machines Corp | 2.0% |
| AbbVie Inc | 1.93% |
| National Retail Properties Inc | 1.86% |
| Federal Realty Investment Trust | 1.77% |
| Realty Income Corp | 1.7% |
| Old Republic International Corp | 1.65% |
SDY’s Top Holdings are Exxon Mobil Corp, AT&T Inc, South Jersey Industries Inc, Chevron Corp, and International Business Machines Corp at 2.81%, 2.5%, 2.22%, 2.02%, and 2.0%.
AbbVie Inc (1.93%), National Retail Properties Inc (1.86%), and Federal Realty Investment Trust (1.77%) have a slightly smaller but still significant weight. Realty Income Corp and Old Republic International Corp are also represented in the SDY’s holdings at 1.7% and 1.65%.
Risk Analysis
| IJR | SDY | |
| Mean Return | 1.21 | 1.07 |
| R-squared | 76.03 | 83.62 |
| Std. Deviation | 18.68 | 12.9 |
| Alpha | -3.7 | -0.1 |
| Beta | 1.2 | 0.87 |
| Sharpe Ratio | 0.74 | 0.95 |
| Treynor Ratio | 10.77 | 13.94 |
The iShares Core S&P Small-Cap ETF (IJR) has a Mean Return of 1.21 with a Standard Deviation of 18.68 and a Sharpe Ratio of 0.74. Its Treynor Ratio is 10.77 while IJR’s Alpha is -3.7. Furthermore, the fund has a Beta of 1.2 and a R-squared of 76.03.
The SPDR S&P Dividend ETF (SDY) has a Sharpe Ratio of 0.95 with a Treynor Ratio of 13.94 and a Standard Deviation of 12.9. Its Mean Return is 1.07 while SDY’s Alpha is -0.1. Furthermore, the fund has a Beta of 0.87 and a R-squared of 83.62.
IJR’s Mean Return is 0.14 points higher than that of SDY and its R-squared is 7.59 points lower. With a Standard Deviation of 18.68, IJR is slightly more volatile than SDY. The Alpha and Beta of IJR are 3.60 points lower and 0.33 points higher than SDY’s Alpha and Beta.
Performance
Annual Returns
| Year | IJR | SDY |
| 2020 | 11.24% | 1.78% |
| 2019 | 22.79% | 23.37% |
| 2018 | -8.43% | -2.73% |
| 2017 | 13.2% | 15.84% |
| 2016 | 26.49% | 20.17% |
| 2015 | -2.0% | -0.7% |
| 2014 | 5.67% | 13.8% |
| 2013 | 41.36% | 30.09% |
| 2012 | 16.28% | 11.51% |
| 2011 | 0.9% | 7.28% |
| 2010 | 26.14% | 16.41% |
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 SDY, returning 30.09% on an annual basis. The poorest year for SDY in the last ten years was 2018, with a yield of -2.73%. Most years the SPDR S&P Dividend ETF has given investors modest returns, such as in 2012, 2014, and 2017, when gains were 11.51%, 13.8%, and 15.84% respectively.
Portfolio Growth
| Fund | Initial Balance | Final Balance | CAGR |
| IJR | $10,000 | $38,800 | 13.97% |
| SDY | $10,000 | $34,806 | 12.44% |
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 SDY, the end total would have been $34,806. This equates to a $24,806 profit over 11 years and a compound annual growth rate (CAGR) of 12.44%.
IJR’s CAGR is 1.53 percentage points higher than that of SDY and as a result, would have yielded $3,994 more on a $10,000 investment. Thus, IJR outperformed SDY by 1.53% annually.
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