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IJR vs. VT: What’s The Difference?

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

The expense ratio of IJR is 0.02 percentage points lower than VT’s (0.06% vs. 0.08%). IJR also has a higher exposure to the industrials sector and a higher standard deviation. Overall, IJR has provided higher returns than VT over the past ten years.

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

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Summary

IJRVT
NameiShares Core S&P Small-Cap ETFVanguard Total World Stock Index Fund ETF Shares
CategorySmall BlendN/A
IssueriSharesVanguard
AUM68.64B30.44B
Avg. Return13.97%10.42%
Div. Yield0.96%1.65%
Expense Ratio0.06%0.08%

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 Total World Stock Index Fund ETF Shares (VT) is a N/A fund that is issued by Vanguard. It currently has 30.44B total assets under management and has yielded an average annual return of 10.42% over the past 10 years. The fund has a dividend yield of 1.65% with an expense ratio of 0.08%.

IJR’s dividend yield is 0.69% lower than that of VT (0.96% vs. 1.65%). Also, IJR yielded on average 3.55% more per year over the past decade (13.97% vs. 10.42%). The expense ratio of IJR is 0.02 percentage points lower than VT’s (0.06% vs. 0.08%).

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Fund Composition

Industry Exposure

IJR vs. VT - Industry Exposure

IJRVT
Technology14.32%19.63%
Industrials17.31%10.7%
Energy4.0%3.48%
Communication Services2.59%9.02%
Utilities1.8%2.6%
Healthcare11.55%11.58%
Consumer Defensive4.01%6.71%
Real Estate9.55%3.64%
Financial Services15.91%15.36%
Consumer Cyclical13.61%12.32%
Basic Materials5.34%4.97%

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 Total World Stock Index Fund ETF Shares (VT) has the most exposure to the Technology sector at 19.63%. This is followed by Financial Services and Consumer Cyclical at 15.36% and 12.32% respectively. Energy (3.48%), Real Estate (3.64%), and Basic Materials (4.97%) only make up 12.09% of the fund’s total assets.

VT’s mid-section with moderate exposure is comprised of Consumer Defensive, Communication Services, Industrials, Healthcare, and Consumer Cyclical stocks at 6.71%, 9.02%, 10.7%, 11.58%, and 12.32%.

IJR is 6.61% more exposed to the Industrials sector than VT (17.31% vs 10.7%). IJR’s exposure to Financial Services and Technology stocks is 0.55% higher and 5.31% lower respectively (15.91% vs. 15.36% and 14.32% vs. 19.63%). In total, Communication Services, Energy, and Consumer Defensive also make up 8.61% less of the fund’s holdings compared to VT (10.60% vs. 19.21%).

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%.

VT - Holdings

VT HoldingsWeight
Apple Inc2.85%
Microsoft Corp2.71%
Amazon.com Inc1.98%
Facebook Inc Class A1.1%
Alphabet Inc Class A0.97%
Alphabet Inc Class C0.95%
Tesla Inc0.7%
NVIDIA Corp0.64%
JPMorgan Chase & Co0.62%
Tencent Holdings Ltd0.6%

VT’s Top Holdings are Apple Inc, Microsoft Corp, Amazon.com Inc, Facebook Inc Class A, and Alphabet Inc Class A at 2.85%, 2.71%, 1.98%, 1.1%, and 0.97%.

Alphabet Inc Class C (0.95%), Tesla Inc (0.7%), and NVIDIA Corp (0.64%) have a slightly smaller but still significant weight. JPMorgan Chase & Co and Tencent Holdings Ltd are also represented in the VT’s holdings at 0.62% and 0.6%.

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Risk Analysis

IJRVT
Mean Return1.210.9
R-squared76.0399.35
Std. Deviation18.6814.19
Alpha-3.70.2
Beta1.21.01
Sharpe Ratio0.740.71
Treynor Ratio10.779.5

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 Beta of 1.2. Its R-squared is 76.03 while IJR’s Standard Deviation is 18.68. Furthermore, the fund has a Alpha of -3.7 and a Sharpe Ratio of 0.74.

The Vanguard Total World Stock Index Fund ETF Shares (VT) has a R-squared of 99.35 with a Standard Deviation of 14.19 and a Treynor Ratio of 9.5. Its Mean Return is 0.9 while VT’s Alpha is 0.2. Furthermore, the fund has a Beta of 1.01 and a Sharpe Ratio of 0.71.

IJR’s Mean Return is 0.31 points higher than that of VT and its R-squared is 23.32 points lower. With a Standard Deviation of 18.68, IJR is slightly more volatile than VT. The Alpha and Beta of IJR are 3.90 points lower and 0.19 points higher than VT’s Alpha and Beta.

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Performance

Annual Returns

IJR vs. VT - Annual Returns

YearIJRVT
202011.24%16.74%
201922.79%26.8%
2018-8.43%-9.67%
201713.2%24.19%
201626.49%8.77%
2015-2.0%-1.88%
20145.67%3.97%
201341.36%22.98%
201216.28%17.33%
20110.9%-7.71%
201026.14%13.05%

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 VT, returning 26.8% on an annual basis. The poorest year for VT in the last ten years was 2018, with a yield of -9.67%. Most years the Vanguard Total World Stock Index Fund ETF Shares has given investors modest returns, such as in 2016, 2010, and 2020, when gains were 8.77%, 13.05%, and 16.74% respectively.

Portfolio Growth

IJR vs. VT - Portfolio Growth

FundInitial BalanceFinal BalanceCAGR
IJR$10,000$38,80013.97%
VT$10,000$27,73910.42%

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 VT, the end total would have been $27,739. This equates to a $17,739 profit over 11 years and a compound annual growth rate (CAGR) of 10.42%.

IJR’s CAGR is 3.55 percentage points higher than that of VT and as a result, would have yielded $11,061 more on a $10,000 investment. Thus, IJR outperformed VT by 3.55% annually.


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