The iShares Core S&P Small-Cap ETF (IJR) and the Vanguard Extended Market Index Fund ETF Shares (VXF) are both among the Top 100 ETFs. IJR is a iShares Small Blend fund and VXF is a Vanguard Mid-Cap Growth fund. So, what’s the difference between IJR and VXF? And which fund is better?
IJR and VXF have the same expense ratio: 0.06%. IJR also has a higher exposure to the industrials sector and a higher standard deviation. Overall, IJR has provided lower returns than VXF over the past ten years.
In this article, we’ll compare IJR vs. VXF. We’ll look at portfolio growth and performance, as well as at their annual returns and holdings. Moreover, I’ll also discuss IJR’s and VXF’s risk metrics, fund composition, and industry exposure and examine how these affect their overall returns.
|Name||iShares Core S&P Small-Cap ETF||Vanguard Extended Market Index Fund ETF Shares|
|Category||Small Blend||Mid-Cap Growth|
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 Extended Market Index Fund ETF Shares (VXF) is a Mid-Cap Growth fund that is issued by Vanguard. It currently has 114.53B total assets under management and has yielded an average annual return of 15.47% over the past 10 years. The fund has a dividend yield of 1.19% with an expense ratio of 0.06%.
IJR’s dividend yield is 0.23% lower than that of VXF (0.96% vs. 1.19%). Also, IJR yielded on average 1.51% less per year over the past decade (13.97% vs. 15.47%). IJR and VXF have the same expense ratio: 0.06%.
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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 Extended Market Index Fund ETF Shares (VXF) has the most exposure to the Technology sector at 23.61%. This is followed by Healthcare and Financial Services at 15.25% and 12.56% respectively. Energy (2.46%), Consumer Defensive (3.09%), and Basic Materials (3.26%) only make up 8.81% of the fund’s total assets.
VXF’s mid-section with moderate exposure is comprised of Communication Services, Real Estate, Industrials, Consumer Cyclical, and Financial Services stocks at 7.29%, 8.16%, 11.31%, 11.35%, and 12.56%.
IJR is 6.00% more exposed to the Industrials sector than VXF (17.31% vs 11.31%). IJR’s exposure to Financial Services and Technology stocks is 3.35% higher and 9.29% lower respectively (15.91% vs. 12.56% and 14.32% vs. 23.61%). In total, Communication Services, Energy, and Consumer Defensive also make up 2.24% less of the fund’s holdings compared to VXF (10.60% vs. 12.84%).
|BlackRock Cash Funds Treasury SL Agency||1.08%|
|GameStop Corp Class A||0.86%|
|Power Integrations Inc||0.57%|
|Chart Industries Inc||0.53%|
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%.
|Square Inc A||1.2%|
|Zoom Video Communications Inc||1.04%|
|Uber Technologies Inc||0.93%|
|Blackstone Group Inc||0.83%|
|Snap Inc Class A||0.8%|
|Twilio Inc A||0.73%|
|CrowdStrike Holdings Inc Class A||0.63%|
|Marvell Technology Inc||0.6%|
VXF’s Top Holdings are Square Inc A, Zoom Video Communications Inc, Uber Technologies Inc, Moderna Inc, and Blackstone Group Inc at 1.2%, 1.04%, 0.93%, 0.9%, and 0.83%.
Snap Inc Class A (0.8%), Twilio Inc A (0.73%), and DocuSign Inc (0.68%) have a slightly smaller but still significant weight. CrowdStrike Holdings Inc Class A and Marvell Technology Inc are also represented in the VXF’s holdings at 0.63% and 0.6%.
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The iShares Core S&P Small-Cap ETF (IJR) has a Standard Deviation of 18.68 with a Alpha of -3.7 and a R-squared of 76.03. Its Mean Return is 1.21 while IJR’s Beta is 1.2. Furthermore, the fund has a Treynor Ratio of 10.77 and a Sharpe Ratio of 0.74.
The Vanguard Extended Market Index Fund ETF Shares (VXF) has a Mean Return of 1.24 with a Sharpe Ratio of 0.79 and a Standard Deviation of 18.04. Its Treynor Ratio is 10.92 while VXF’s R-squared is 85.73. Furthermore, the fund has a Alpha of -3.26 and a Beta of 1.23.
IJR’s Mean Return is 0.03 points lower than that of VXF and its R-squared is 9.70 points lower. With a Standard Deviation of 18.68, IJR is slightly more volatile than VXF. The Alpha and Beta of IJR are 0.44 points lower and 0.03 points lower than VXF’s Alpha and Beta.
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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 VXF, returning 38.37% on an annual basis. The poorest year for VXF in the last ten years was 2018, with a yield of -9.37%. Most years the Vanguard Extended Market Index Fund ETF Shares has given investors modest returns, such as in 2016, 2017, and 2012, when gains were 16.16%, 18.1%, and 18.48% respectively.
|Fund||Initial Balance||Final Balance||CAGR|
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 VXF, the end total would have been $44,130. This equates to a $34,130 profit over 11 years and a compound annual growth rate (CAGR) of 15.47%.
IJR’s CAGR is 1.51 percentage points lower than that of VXF and as a result, would have yielded $5,330 less on a $10,000 investment. Thus, IJR performed worse than VXF by 1.51% annually.
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