The iShares Core S&P Small-Cap ETF (IJR) and the iShares MSCI USA Value Factor ETF (VLUE) are both among the Top 100 ETFs. IJR is a iShares Small Blend fund and VLUE is a iShares Large Value fund. So, what’s the difference between IJR and VLUE? And which fund is better?
The expense ratio of IJR is 0.09 percentage points lower than VLUE’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 VLUE over the past ten years.
In this article, we’ll compare IJR vs. VLUE. We’ll look at portfolio growth and industry exposure, as well as at their risk metrics and annual returns. Moreover, I’ll also discuss IJR’s and VLUE’s performance, holdings, and fund composition and examine how these affect their overall returns.
Summary
| IJR | VLUE | |
| Name | iShares Core S&P Small-Cap ETF | iShares MSCI USA Value Factor ETF |
| Category | Small Blend | Large Value |
| Issuer | iShares | iShares |
| AUM | 68.64B | 15.95B |
| Avg. Return | 13.97% | 8.91% |
| Div. Yield | 0.96% | 1.89% |
| 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 Value Factor ETF (VLUE) is a Large Value fund that is issued by iShares. It currently has 15.95B total assets under management and has yielded an average annual return of 8.91% over the past 10 years. The fund has a dividend yield of 1.89% with an expense ratio of 0.15%.
IJR’s dividend yield is 0.93% lower than that of VLUE (0.96% vs. 1.89%). Also, IJR yielded on average 5.06% more per year over the past decade (13.97% vs. 8.91%). The expense ratio of IJR is 0.09 percentage points lower than VLUE’s (0.06% vs. 0.15%).
Fund Composition
Industry Exposure
| IJR | VLUE | |
| Technology | 14.32% | 26.89% |
| Industrials | 17.31% | 9.14% |
| Energy | 4.0% | 2.42% |
| Communication Services | 2.59% | 10.39% |
| Utilities | 1.8% | 2.68% |
| Healthcare | 11.55% | 14.31% |
| Consumer Defensive | 4.01% | 7.22% |
| Real Estate | 9.55% | 3.19% |
| Financial Services | 15.91% | 10.96% |
| Consumer Cyclical | 13.61% | 10.66% |
| Basic Materials | 5.34% | 2.14% |
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 Value Factor ETF (VLUE) has the most exposure to the Technology sector at 26.89%. This is followed by Healthcare and Financial Services at 14.31% and 10.96% respectively. Energy (2.42%), Utilities (2.68%), and Real Estate (3.19%) only make up 8.29% of the fund’s total assets.
VLUE’s mid-section with moderate exposure is comprised of Consumer Defensive, Industrials, Communication Services, Consumer Cyclical, and Financial Services stocks at 7.22%, 9.14%, 10.39%, 10.66%, and 10.96%.
IJR is 8.17% more exposed to the Industrials sector than VLUE (17.31% vs 9.14%). IJR’s exposure to Financial Services and Technology stocks is 4.95% higher and 12.57% lower respectively (15.91% vs. 10.96% and 14.32% vs. 26.89%). In total, Communication Services, Energy, and Consumer Defensive also make up 9.43% less of the fund’s holdings compared to VLUE (10.60% vs. 20.03%).
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%.
| VLUE Holdings | Weight |
| AT&T Inc | 7.13% |
| Intel Corp | 6.14% |
| General Motors Co | 3.19% |
| Micron Technology Inc | 3.14% |
| Cisco Systems Inc | 3.05% |
| International Business Machines Corp | 2.76% |
| Target Corp | 2.38% |
| Citigroup Inc | 2.32% |
| Ford Motor Co | 2.23% |
| Pfizer Inc | 2.17% |
VLUE’s Top Holdings are AT&T Inc, Intel Corp, General Motors Co, Micron Technology Inc, and Cisco Systems Inc at 7.13%, 6.14%, 3.19%, 3.14%, and 3.05%.
International Business Machines Corp (2.76%), Target Corp (2.38%), and Citigroup Inc (2.32%) have a slightly smaller but still significant weight. Ford Motor Co and Pfizer Inc are also represented in the VLUE’s holdings at 2.23% and 2.17%.
Risk Analysis
| IJR | VLUE | |
| 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 R-squared of 76.03 with a Sharpe Ratio of 0.74 and a Beta of 1.2. Its Mean Return is 1.21 while IJR’s Alpha is -3.7. Furthermore, the fund has a Standard Deviation of 18.68 and a Treynor Ratio of 10.77.
The iShares MSCI USA Value Factor ETF (VLUE) has a Alpha of 0 with a Standard Deviation of 0 and a Mean Return of 0. Its R-squared is 0 while VLUE’s Treynor Ratio is 0. Furthermore, the fund has a Beta of 0 and a Sharpe Ratio of 0.
IJR’s Mean Return is 1.21 points higher than that of VLUE and its R-squared is 76.03 points higher. With a Standard Deviation of 18.68, IJR is slightly more volatile than VLUE. The Alpha and Beta of IJR are 3.70 points lower and 1.20 points higher than VLUE’s Alpha and Beta.
Performance
Annual Returns
| Year | IJR | VLUE |
| 2020 | 11.24% | -0.32% |
| 2019 | 22.79% | 27.47% |
| 2018 | -8.43% | -11.18% |
| 2017 | 13.2% | 21.97% |
| 2016 | 26.49% | 15.68% |
| 2015 | -2.0% | -3.54% |
| 2014 | 5.67% | 12.29% |
| 2013 | 41.36% | 0.0% |
| 2012 | 16.28% | 0.0% |
| 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 VLUE, returning 27.47% on an annual basis. The poorest year for VLUE in the last ten years was 2018, with a yield of -11.18%. Most years the iShares MSCI USA Value Factor ETF has given investors modest returns, such as in 2012, 2011, and 2010, when gains were 0.0%, 0.0%, and 0.0% respectively.
Portfolio Growth
| Fund | Initial Balance | Final Balance | CAGR |
| IJR | $10,000 | $18,546 | 13.97% |
| VLUE | $10,000 | $17,247 | 8.91% |
A $10,000 investment in IJR would have resulted in a final balance of $18,546. This is a profit of $8,546 over 7 years and amounts to a compound annual growth rate (CAGR) of 13.97%.
With a $10,000 investment in VLUE, the end total would have been $17,247. This equates to a $7,247 profit over 7 years and a compound annual growth rate (CAGR) of 8.91%.
IJR’s CAGR is 5.06 percentage points higher than that of VLUE and as a result, would have yielded $1,299 more on a $10,000 investment. Thus, IJR outperformed VLUE by 5.06% annually.
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