The iShares Core S&P Small-Cap ETF (IJR) and the Vanguard Mid-Cap Value Index Fund ETF Shares (VOE) are both among the Top 100 ETFs. IJR is a iShares Small Blend fund and VOE is a Vanguard Mid-Cap Value fund. So, what’s the difference between IJR and VOE? And which fund is better?
The expense ratio of IJR is 0.01 percentage points lower than VOE’s (0.06% vs. 0.07%). IJR also has a higher exposure to the industrials sector and a higher standard deviation. Overall, IJR has provided higher returns than VOE over the past ten years.
In this article, we’ll compare IJR vs. VOE. We’ll look at portfolio growth and industry exposure, as well as at their fund composition and annual returns. Moreover, I’ll also discuss IJR’s and VOE’s risk metrics, holdings, and performance and examine how these affect their overall returns.
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Summary
| IJR | VOE | |
| Name | iShares Core S&P Small-Cap ETF | Vanguard Mid-Cap Value Index Fund ETF Shares |
| Category | Small Blend | Mid-Cap Value |
| Issuer | iShares | Vanguard |
| AUM | 68.64B | 26.78B |
| Avg. Return | 13.97% | 12.52% |
| Div. Yield | 0.96% | 1.87% |
| Expense Ratio | 0.06% | 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 Mid-Cap Value Index Fund ETF Shares (VOE) is a Mid-Cap Value fund that is issued by Vanguard. It currently has 26.78B total assets under management and has yielded an average annual return of 12.52% over the past 10 years. The fund has a dividend yield of 1.87% with an expense ratio of 0.07%.
IJR’s dividend yield is 0.91% lower than that of VOE (0.96% vs. 1.87%). Also, IJR yielded on average 1.44% more per year over the past decade (13.97% vs. 12.52%). The expense ratio of IJR is 0.01 percentage points lower than VOE’s (0.06% vs. 0.07%).
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Fund Composition
Industry Exposure
| IJR | VOE | |
| Technology | 14.32% | 9.85% |
| Industrials | 17.31% | 9.4% |
| Energy | 4.0% | 5.69% |
| Communication Services | 2.59% | 5.27% |
| Utilities | 1.8% | 10.93% |
| Healthcare | 11.55% | 7.04% |
| Consumer Defensive | 4.01% | 4.85% |
| Real Estate | 9.55% | 11.48% |
| Financial Services | 15.91% | 18.26% |
| Consumer Cyclical | 13.61% | 11.8% |
| Basic Materials | 5.34% | 5.44% |
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 Mid-Cap Value Index Fund ETF Shares (VOE) has the most exposure to the Financial Services sector at 18.26%. This is followed by Consumer Cyclical and Real Estate at 11.8% and 11.48% respectively. Communication Services (5.27%), Basic Materials (5.44%), and Energy (5.69%) only make up 16.40% of the fund’s total assets.
VOE’s mid-section with moderate exposure is comprised of Healthcare, Industrials, Technology, Utilities, and Real Estate stocks at 7.04%, 9.4%, 9.85%, 10.93%, and 11.48%.
IJR is 7.91% more exposed to the Industrials sector than VOE (17.31% vs 9.4%). IJR’s exposure to Financial Services and Technology stocks is 2.35% lower and 4.47% higher respectively (15.91% vs. 18.26% and 14.32% vs. 9.85%). In total, Communication Services, Energy, and Consumer Defensive also make up 5.21% less of the fund’s holdings compared to VOE (10.60% vs. 15.81%).
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%.
| VOE Holdings | Weight |
| Carrier Global Corp Ordinary Shares | 1.28% |
| International Flavors & Fragrances Inc | 1.13% |
| Motorola Solutions Inc | 1.12% |
| Discover Financial Services | 1.09% |
| Welltower Inc | 1.05% |
| Corteva Inc | 0.99% |
| Valero Energy Corp | 0.97% |
| Corning Inc | 0.95% |
| Willis Towers Watson PLC | 0.9% |
| D.R. Horton Inc | 0.89% |
VOE’s Top Holdings are Carrier Global Corp Ordinary Shares, International Flavors & Fragrances Inc, Motorola Solutions Inc, Discover Financial Services, and Welltower Inc at 1.28%, 1.13%, 1.12%, 1.09%, and 1.05%.
Corteva Inc (0.99%), Valero Energy Corp (0.97%), and Corning Inc (0.95%) have a slightly smaller but still significant weight. Willis Towers Watson PLC and D.R. Horton Inc are also represented in the VOE’s holdings at 0.9% and 0.89%.
Risk Analysis
| IJR | VOE | |
| Mean Return | 1.21 | 1.05 |
| R-squared | 76.03 | 88.76 |
| Std. Deviation | 18.68 | 15.98 |
| Alpha | -3.7 | -3.77 |
| Beta | 1.2 | 1.11 |
| Sharpe Ratio | 0.74 | 0.75 |
| Treynor Ratio | 10.77 | 10.19 |
The iShares Core S&P Small-Cap ETF (IJR) has a Treynor Ratio of 10.77 with a Mean Return of 1.21 and a Standard Deviation of 18.68. Its Sharpe Ratio is 0.74 while IJR’s Beta is 1.2. Furthermore, the fund has a Alpha of -3.7 and a R-squared of 76.03.
The Vanguard Mid-Cap Value Index Fund ETF Shares (VOE) has a Alpha of -3.77 with a Mean Return of 1.05 and a Treynor Ratio of 10.19. Its Sharpe Ratio is 0.75 while VOE’s Beta is 1.11. Furthermore, the fund has a Standard Deviation of 15.98 and a R-squared of 88.76.
IJR’s Mean Return is 0.16 points higher than that of VOE and its R-squared is 12.73 points lower. With a Standard Deviation of 18.68, IJR is slightly more volatile than VOE. The Alpha and Beta of IJR are 0.07 points higher and 0.09 points higher than VOE’s Alpha and Beta.
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Performance
Annual Returns
| Year | IJR | VOE |
| 2020 | 11.24% | 2.5% |
| 2019 | 22.79% | 27.98% |
| 2018 | -8.43% | -12.41% |
| 2017 | 13.2% | 17.05% |
| 2016 | 26.49% | 15.26% |
| 2015 | -2.0% | -1.8% |
| 2014 | 5.67% | 13.98% |
| 2013 | 41.36% | 37.65% |
| 2012 | 16.28% | 16.04% |
| 2011 | 0.9% | -0.32% |
| 2010 | 26.14% | 21.83% |
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 VOE, returning 37.65% on an annual basis. The poorest year for VOE in the last ten years was 2018, with a yield of -12.41%. Most years the Vanguard Mid-Cap Value Index Fund ETF Shares has given investors modest returns, such as in 2014, 2016, and 2012, when gains were 13.98%, 15.26%, and 16.04% respectively.
Portfolio Growth
| Fund | Initial Balance | Final Balance | CAGR |
| IJR | $10,000 | $38,800 | 13.97% |
| VOE | $10,000 | $33,655 | 12.52% |
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 VOE, the end total would have been $33,655. This equates to a $23,655 profit over 11 years and a compound annual growth rate (CAGR) of 12.52%.
IJR’s CAGR is 1.44 percentage points higher than that of VOE and as a result, would have yielded $5,145 more on a $10,000 investment. Thus, IJR outperformed VOE by 1.44% annually.
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