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IJR vs. VBR: What’s The Difference?

The iShares Core S&P Small-Cap ETF (IJR) and the Vanguard Small-Cap Value Index Fund ETF Shares (VBR) are both among the Top 100 ETFs. IJR is a iShares Small Blend fund and VBR is a Vanguard Small Value fund. So, what’s the difference between IJR and VBR? And which fund is better?

The expense ratio of IJR is 0.01 percentage points lower than VBR’s (0.06% vs. 0.07%). IJR also has a lower exposure to the industrials sector and a higher standard deviation. Overall, IJR has provided higher returns than VBR over the past ten years.

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

Introduction To Mutual Funds
Introduction To Mutual Funds
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Summary

IJRVBR
NameiShares Core S&P Small-Cap ETFVanguard Small-Cap Value Index Fund ETF Shares
CategorySmall BlendSmall Value
IssueriSharesVanguard
AUM68.64B48.08B
Avg. Return13.97%12.28%
Div. Yield0.96%1.6%
Expense Ratio0.06%0.07%

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 Vanguard Small-Cap Value Index Fund ETF Shares (VBR) is a Small Value fund that is issued by Vanguard. It currently has 48.08B total assets under management and has yielded an average annual return of 12.28% over the past 10 years. The fund has a dividend yield of 1.6% with an expense ratio of 0.07%.

IJR’s dividend yield is 0.64% lower than that of VBR (0.96% vs. 1.6%). Also, IJR yielded on average 1.69% more per year over the past decade (13.97% vs. 12.28%). The expense ratio of IJR is 0.01 percentage points lower than VBR’s (0.06% vs. 0.07%).

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Fund Composition

Industry Exposure

IJR vs. VBR - Industry Exposure

IJRVBR
Technology14.32%8.39%
Industrials17.31%18.44%
Energy4.0%5.15%
Communication Services2.59%1.77%
Utilities1.8%3.65%
Healthcare11.55%7.16%
Consumer Defensive4.01%4.36%
Real Estate9.55%10.92%
Financial Services15.91%20.04%
Consumer Cyclical13.61%13.82%
Basic Materials5.34%6.31%

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 Vanguard Small-Cap Value Index Fund ETF Shares (VBR) has the most exposure to the Financial Services sector at 20.04%. This is followed by Industrials and Consumer Cyclical at 18.44% and 13.82% respectively. Utilities (3.65%), Consumer Defensive (4.36%), and Energy (5.15%) only make up 13.16% of the fund’s total assets.

VBR’s mid-section with moderate exposure is comprised of Basic Materials, Healthcare, Technology, Real Estate, and Consumer Cyclical stocks at 6.31%, 7.16%, 8.39%, 10.92%, and 13.82%.

IJR is 1.13% less exposed to the Industrials sector than VBR (17.31% vs 18.44%). IJR’s exposure to Financial Services and Technology stocks is 4.13% lower and 5.93% higher respectively (15.91% vs. 20.04% and 14.32% vs. 8.39%). In total, Communication Services, Energy, and Consumer Defensive also make up 0.68% less of the fund’s holdings compared to VBR (10.60% vs. 11.28%).

Holdings

IJR - Holdings

IJR HoldingsWeight
BlackRock Cash Funds Treasury SL Agency1.08%
GameStop Corp Class A0.86%
Omnicell Inc0.61%
Stamps.com Inc0.58%
Saia Inc0.57%
Power Integrations Inc0.57%
Exponent Inc0.54%
NeoGenomics Inc0.53%
Chart Industries Inc0.53%
Macy’s Inc0.51%

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%.

VBR - Holdings

VBR HoldingsWeight
Diamondback Energy Inc0.55%
VICI Properties Inc Ordinary Shares0.54%
IDEX Corp0.54%
Nuance Communications Inc0.5%
Molina Healthcare Inc0.48%
Signature Bank0.46%
Novavax Inc0.44%
Howmet Aerospace Inc0.44%
Apollo Global Management Inc Class A0.42%
Brown & Brown Inc0.41%

VBR’s Top Holdings are Diamondback Energy Inc, VICI Properties Inc Ordinary Shares, IDEX Corp, Nuance Communications Inc, and Molina Healthcare Inc at 0.55%, 0.54%, 0.54%, 0.5%, and 0.48%.

Signature Bank (0.46%), Novavax Inc (0.44%), and Howmet Aerospace Inc (0.44%) have a slightly smaller but still significant weight. Apollo Global Management Inc Class A and Brown & Brown Inc are also represented in the VBR’s holdings at 0.42% and 0.41%.

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Risk Analysis

IJRVBR
Mean Return1.211.08
R-squared76.0382.2
Std. Deviation18.6818.37
Alpha-3.7-5.09
Beta1.21.23
Sharpe Ratio0.740.67
Treynor Ratio10.779.15

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

The Vanguard Small-Cap Value Index Fund ETF Shares (VBR) has a Standard Deviation of 18.37 with a Sharpe Ratio of 0.67 and a R-squared of 82.2. Its Mean Return is 1.08 while VBR’s Beta is 1.23. Furthermore, the fund has a Alpha of -5.09 and a Treynor Ratio of 9.15.

IJR’s Mean Return is 0.13 points higher than that of VBR and its R-squared is 6.17 points lower. With a Standard Deviation of 18.68, IJR is slightly more volatile than VBR. The Alpha and Beta of IJR are 1.39 points higher and 0.03 points lower than VBR’s Alpha and Beta.

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Performance

Annual Returns

IJR vs. VBR - Annual Returns

YearIJRVBR
202011.24%5.82%
201922.79%22.76%
2018-8.43%-12.22%
201713.2%11.79%
201626.49%24.8%
2015-2.0%-4.67%
20145.67%10.55%
201341.36%36.57%
201216.28%18.78%
20110.9%-4.05%
201026.14%24.97%

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 VBR, returning 36.57% on an annual basis. The poorest year for VBR in the last ten years was 2018, with a yield of -12.22%. Most years the Vanguard Small-Cap Value Index Fund ETF Shares has given investors modest returns, such as in 2014, 2017, and 2012, when gains were 10.55%, 11.79%, and 18.78% respectively.

Portfolio Growth

IJR vs. VBR - Portfolio Growth

FundInitial BalanceFinal BalanceCAGR
IJR$10,000$38,80013.97%
VBR$10,000$32,61112.28%

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 VBR, the end total would have been $32,611. This equates to a $22,611 profit over 11 years and a compound annual growth rate (CAGR) of 12.28%.

IJR’s CAGR is 1.69 percentage points higher than that of VBR and as a result, would have yielded $6,189 more on a $10,000 investment. Thus, IJR outperformed VBR by 1.69% annually.


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