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IJR vs. VXUS: What’s The Difference?

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

The expense ratio of IJR is 0.02 percentage points lower than VXUS’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 VXUS over the past ten years.

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

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Summary

IJRVXUS
NameiShares Core S&P Small-Cap ETFVanguard Total International Stock Index Fund ETF Shares
CategorySmall BlendForeign Large Blend
IssueriSharesVanguard
AUM68.64B404.73B
Avg. Return13.97%8.41%
Div. Yield0.96%2.44%
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 International Stock Index Fund ETF Shares (VXUS) is a Foreign Large Blend fund that is issued by Vanguard. It currently has 404.73B total assets under management and has yielded an average annual return of 8.41% over the past 10 years. The fund has a dividend yield of 2.44% with an expense ratio of 0.08%.

IJR’s dividend yield is 1.48% lower than that of VXUS (0.96% vs. 2.44%). Also, IJR yielded on average 5.56% more per year over the past decade (13.97% vs. 8.41%). The expense ratio of IJR is 0.02 percentage points lower than VXUS’s (0.06% vs. 0.08%).

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Fund Composition

Industry Exposure

IJR vs. VXUS - Industry Exposure

IJRVXUS
Technology14.32%13.07%
Industrials17.31%12.94%
Energy4.0%4.55%
Communication Services2.59%7.06%
Utilities1.8%2.94%
Healthcare11.55%9.19%
Consumer Defensive4.01%7.83%
Real Estate9.55%3.79%
Financial Services15.91%17.64%
Consumer Cyclical13.61%12.64%
Basic Materials5.34%8.37%

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 International Stock Index Fund ETF Shares (VXUS) has the most exposure to the Financial Services sector at 17.64%. This is followed by Technology and Industrials at 13.07% and 12.94% respectively. Real Estate (3.79%), Energy (4.55%), and Communication Services (7.06%) only make up 15.40% of the fund’s total assets.

VXUS’s mid-section with moderate exposure is comprised of Consumer Defensive, Basic Materials, Healthcare, Consumer Cyclical, and Industrials stocks at 7.83%, 8.37%, 9.19%, 12.64%, and 12.94%.

IJR is 4.37% more exposed to the Industrials sector than VXUS (17.31% vs 12.94%). IJR’s exposure to Financial Services and Technology stocks is 1.73% lower and 1.25% higher respectively (15.91% vs. 17.64% and 14.32% vs. 13.07%). In total, Communication Services, Energy, and Consumer Defensive also make up 8.84% less of the fund’s holdings compared to VXUS (10.60% vs. 19.44%).

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%.

VXUS - Holdings

VXUS HoldingsWeight
Taiwan Semiconductor Manufacturing Co Ltd1.62%
Tencent Holdings Ltd1.41%
Alibaba Group Holding Ltd Ordinary Shares1.26%
Nestle SA1.1%
Samsung Electronics Co Ltd1.05%
ASML Holding NV0.86%
Roche Holding AG0.81%
Toyota Motor Corp0.67%
LVMH Moet Hennessy Louis Vuitton SE0.61%
Novartis AG0.6%

VXUS’s Top Holdings are Taiwan Semiconductor Manufacturing Co Ltd, Tencent Holdings Ltd, Alibaba Group Holding Ltd Ordinary Shares, Nestle SA, and Samsung Electronics Co Ltd at 1.62%, 1.41%, 1.26%, 1.1%, and 1.05%.

ASML Holding NV (0.86%), Roche Holding AG (0.81%), and Toyota Motor Corp (0.67%) have a slightly smaller but still significant weight. LVMH Moet Hennessy Louis Vuitton SE and Novartis AG are also represented in the VXUS’s holdings at 0.61% and 0.6%.

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Risk Analysis

IJRVXUS
Mean Return1.210.56
R-squared76.0398.39
Std. Deviation18.6815.12
Alpha-3.70.31
Beta1.20.99
Sharpe Ratio0.740.4
Treynor Ratio10.775.14

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

The Vanguard Total International Stock Index Fund ETF Shares (VXUS) has a Sharpe Ratio of 0.4 with a Standard Deviation of 15.12 and a Treynor Ratio of 5.14. Its Beta is 0.99 while VXUS’s R-squared is 98.39. Furthermore, the fund has a Alpha of 0.31 and a Mean Return of 0.56.

IJR’s Mean Return is 0.65 points higher than that of VXUS and its R-squared is 22.36 points lower. With a Standard Deviation of 18.68, IJR is slightly more volatile than VXUS. The Alpha and Beta of IJR are 4.01 points lower and 0.21 points higher than VXUS’s Alpha and Beta.

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Performance

Annual Returns

IJR vs. VXUS - Annual Returns

YearIJRVXUS
202011.24%11.32%
201922.79%21.58%
2018-8.43%-14.42%
201713.2%27.52%
201626.49%4.72%
2015-2.0%-4.28%
20145.67%-4.17%
201341.36%15.16%
201216.28%18.22%
20110.9%0.0%
201026.14%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 2017 was the strongest year for VXUS, returning 27.52% on an annual basis. The poorest year for VXUS in the last ten years was 2018, with a yield of -14.42%. Most years the Vanguard Total International Stock Index Fund ETF Shares has given investors modest returns, such as in 2010, 2016, and 2020, when gains were 0.0%, 4.72%, and 11.32% respectively.

Portfolio Growth

IJR vs. VXUS - Portfolio Growth

FundInitial BalanceFinal BalanceCAGR
IJR$10,000$30,48513.97%
VXUS$10,000$19,3158.41%

A $10,000 investment in IJR would have resulted in a final balance of $30,485. This is a profit of $20,485 over 9 years and amounts to a compound annual growth rate (CAGR) of 13.97%.

With a $10,000 investment in VXUS, the end total would have been $19,315. This equates to a $9,315 profit over 9 years and a compound annual growth rate (CAGR) of 8.41%.

IJR’s CAGR is 5.56 percentage points higher than that of VXUS and as a result, would have yielded $11,170 more on a $10,000 investment. Thus, IJR outperformed VXUS by 5.56% annually.


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