IJR vs. USMV: What’s The Difference?

The iShares Core S&P Small-Cap ETF (IJR) and the iShares MSCI USA Min Vol Factor ETF (USMV) are both among the Top 100 ETFs. IJR is a iShares Small Blend fund and USMV is a iShares Large Blend fund. So, what’s the difference between IJR and USMV? And which fund is better?

The expense ratio of IJR is 0.09 percentage points lower than USMV’s (0.06% vs. 0.15%). IJR also has a higher exposure to the industrials sector and a higher standard deviation. Overall, IJR has provided higher returns than USMV over the past ten years.

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

Summary

IJR USMV
Name iShares Core S&P Small-Cap ETF iShares MSCI USA Min Vol Factor ETF
Category Small Blend Large Blend
Issuer iShares iShares
AUM 68.64B 27.6B
Avg. Return 13.97% 13.89%
Div. Yield 0.96% 1.5%
Expense Ratio 0.06% 0.15%

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 MSCI USA Min Vol Factor ETF (USMV) is a Large Blend fund that is issued by iShares. It currently has 27.6B total assets under management and has yielded an average annual return of 13.89% over the past 10 years. The fund has a dividend yield of 1.5% with an expense ratio of 0.15%.

IJR’s dividend yield is 0.54% lower than that of USMV (0.96% vs. 1.5%). Also, IJR yielded on average 0.07% more per year over the past decade (13.97% vs. 13.89%). The expense ratio of IJR is 0.09 percentage points lower than USMV’s (0.06% vs. 0.15%).

Fund Composition

Industry Exposure

IJR vs. USMV - Industry Exposure

IJR USMV
Technology 14.32% 20.53%
Industrials 17.31% 10.51%
Energy 4.0% 0.21%
Communication Services 2.59% 11.03%
Utilities 1.8% 6.93%
Healthcare 11.55% 18.42%
Consumer Defensive 4.01% 12.82%
Real Estate 9.55% 2.73%
Financial Services 15.91% 9.65%
Consumer Cyclical 13.61% 5.53%
Basic Materials 5.34% 1.65%

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 iShares MSCI USA Min Vol Factor ETF (USMV) has the most exposure to the Technology sector at 20.53%. This is followed by Healthcare and Consumer Defensive at 18.42% and 12.82% respectively. Basic Materials (1.65%), Real Estate (2.73%), and Consumer Cyclical (5.53%) only make up 9.91% of the fund’s total assets.

USMV’s mid-section with moderate exposure is comprised of Utilities, Financial Services, Industrials, Communication Services, and Consumer Defensive stocks at 6.93%, 9.65%, 10.51%, 11.03%, and 12.82%.

IJR is 6.80% more exposed to the Industrials sector than USMV (17.31% vs 10.51%). IJR’s exposure to Financial Services and Technology stocks is 6.26% higher and 6.21% lower respectively (15.91% vs. 9.65% and 14.32% vs. 20.53%). In total, Communication Services, Energy, and Consumer Defensive also make up 13.46% less of the fund’s holdings compared to USMV (10.60% vs. 24.06%).

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%.

USMV - Holdings

USMV Holdings Weight
Eli Lilly and Co 1.64%
Microsoft Corp 1.62%
T-Mobile US Inc 1.51%
Accenture PLC Class A 1.51%
Visa Inc Class A 1.49%
Waste Management Inc 1.45%
Adobe Inc 1.45%
The Kroger Co 1.44%
Johnson & Johnson 1.42%
Gilead Sciences Inc 1.42%

USMV’s Top Holdings are Eli Lilly and Co, Microsoft Corp, T-Mobile US Inc, Accenture PLC Class A, and Visa Inc Class A at 1.64%, 1.62%, 1.51%, 1.51%, and 1.49%.

Waste Management Inc (1.45%), Adobe Inc (1.45%), and The Kroger Co (1.44%) have a slightly smaller but still significant weight. Johnson & Johnson and Gilead Sciences Inc are also represented in the USMV’s holdings at 1.42% and 1.42%.

Risk Analysis

IJR USMV
Mean Return 1.21 0
R-squared 76.03 0
Std. Deviation 18.68 0
Alpha -3.7 0
Beta 1.2 0
Sharpe Ratio 0.74 0
Treynor Ratio 10.77 0

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

The iShares MSCI USA Min Vol Factor ETF (USMV) has a Sharpe Ratio of 0 with a Standard Deviation of 0 and a R-squared of 0. Its Treynor Ratio is 0 while USMV’s Mean Return is 0. Furthermore, the fund has a Alpha of 0 and a Beta of 0.

IJR’s Mean Return is 1.21 points higher than that of USMV and its R-squared is 76.03 points higher. With a Standard Deviation of 18.68, IJR is slightly more volatile than USMV. The Alpha and Beta of IJR are 3.70 points lower and 1.20 points higher than USMV’s Alpha and Beta.

Performance

Annual Returns

IJR vs. USMV - Annual Returns

Year IJR USMV
2020 11.24% 5.6%
2019 22.79% 27.77%
2018 -8.43% 1.36%
2017 13.2% 18.97%
2016 26.49% 10.5%
2015 -2.0% 5.5%
2014 5.67% 16.34%
2013 41.36% 25.11%
2012 16.28% 11.04%
2011 0.9% 0.0%
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 2019 was the strongest year for USMV, returning 27.77% on an annual basis. The poorest year for USMV in the last ten years was 2011, with a yield of 0.0%. Most years the iShares MSCI USA Min Vol Factor ETF has given investors modest returns, such as in 2020, 2016, and 2012, when gains were 5.6%, 10.5%, and 11.04% respectively.

Portfolio Growth

IJR vs. USMV - Portfolio Growth

Fund Initial Balance Final Balance CAGR
IJR $10,000 $26,217 13.97%
USMV $10,000 $27,607 13.89%

A $10,000 investment in IJR would have resulted in a final balance of $26,217. This is a profit of $16,217 over 8 years and amounts to a compound annual growth rate (CAGR) of 13.97%.

With a $10,000 investment in USMV, the end total would have been $27,607. This equates to a $17,607 profit over 8 years and a compound annual growth rate (CAGR) of 13.89%.

IJR’s CAGR is 0.07 percentage points higher than that of USMV and as a result, would have yielded $1,390 less on a $10,000 investment. Thus, IJR outperformed USMV by 0.07% annually.


Current recommendations:

Over the past years, I have discovered several tools and products that have helped me tremendously on my path to financial freedom:

P.S.: The links below are affiliate links, which means I receive a small commission at no extra cost to you when you sign up for one of the services. Thank you for your support!

1) Take a look at M1 Finance, my favorite broker. I love how easy it is to invest and maintain my portfolio with them. I can set up automatic transfers, rebalance my portfolio with one click and even borrow up to 35% of my assets at super low interest rates!

2) Fundrise is by far the best way I've found to invest in Real Estate. You can diversify your portfolio by investing in their eREITs or even allocate capital to individual properties (without the hassle of managing tenants!).

3) If you are interested in crypto, check out Gemini. I've started allocating a small amount of assets to the growing crypto space and Gemini has just been a breeze to use. Once you register, make sure to also open an Active Trader account to buy crypto at the lowest fees on the market (just 0.03%!).

To see all of my most up-to-date recommendations, check out the Recommended Tools section.

Leave a Reply