VOO vs. IJR: What’s The Difference?

The Vanguard S&P 500 ETF (VOO) and the iShares Core S&P Small-Cap ETF (IJR) are both among the Top 100 ETFs. VOO is a Vanguard Large Blend fund and IJR is a iShares Small Blend fund. So, what’s the difference between VOO and IJR? And which fund is better?

The expense ratio of VOO is 0.03 percentage points lower than IJR’s (0.03% vs. 0.06%). VOO also has a higher exposure to the technology sector and a lower standard deviation. Overall, VOO has provided higher returns than IJR over the past ten years.

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

Summary

VOO IJR
Name Vanguard S&P 500 ETF iShares Core S&P Small-Cap ETF
Category Large Blend Small Blend
Issuer Vanguard iShares
AUM 753.41B 68.64B
Avg. Return 14.45% 13.97%
Div. Yield 1.34% 0.96%
Expense Ratio 0.03% 0.06%

The Vanguard S&P 500 ETF (VOO) is a Large Blend fund that is issued by Vanguard. It currently has 753.41B total assets under management and has yielded an average annual return of 14.45% over the past 10 years. The fund has a dividend yield of 1.34% with an expense ratio of 0.03%.

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%.

VOO’s dividend yield is 0.38% higher than that of IJR (1.34% vs. 0.96%). Also, VOO yielded on average 0.48% more per year over the past decade (14.45% vs. 13.97%). The expense ratio of VOO is 0.03 percentage points lower than IJR’s (0.03% vs. 0.06%).

Fund Composition

Industry Exposure

VOO vs. IJR - Industry Exposure

VOO IJR
Technology 24.24% 14.32%
Industrials 8.86% 17.31%
Energy 2.84% 4.0%
Communication Services 11.14% 2.59%
Utilities 2.43% 1.8%
Healthcare 13.1% 11.55%
Consumer Defensive 6.32% 4.01%
Real Estate 2.58% 9.55%
Financial Services 14.2% 15.91%
Consumer Cyclical 12.01% 13.61%
Basic Materials 2.27% 5.34%

The Vanguard S&P 500 ETF (VOO) has the most exposure to the Technology sector at 24.24%. This is followed by Financial Services and Healthcare at 14.2% and 13.1% respectively. Utilities (2.43%), Real Estate (2.58%), and Energy (2.84%) only make up 7.85% of the fund’s total assets.

VOO’s mid-section with moderate exposure is comprised of Consumer Defensive, Industrials, Communication Services, Consumer Cyclical, and Healthcare stocks at 6.32%, 8.86%, 11.14%, 12.01%, and 13.1%.

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%.

VOO is 9.92% more exposed to the Technology sector than IJR (24.24% vs 14.32%). VOO’s exposure to Financial Services and Healthcare stocks is 1.71% lower and 1.55% higher respectively (14.2% vs. 15.91% and 13.1% vs. 11.55%). In total, Utilities, Real Estate, and Energy also make up 7.50% less of the fund’s holdings compared to IJR (7.85% vs. 15.35%).

Holdings

VOO - Holdings

VOO Holdings Weight
Apple Inc 5.92%
Microsoft Corp 5.62%
Amazon.com Inc 4.06%
Facebook Inc Class A 2.29%
Alphabet Inc Class A 2.02%
Alphabet Inc Class C 1.97%
Tesla Inc 1.44%
Berkshire Hathaway Inc Class B 1.44%
NVIDIA Corp 1.37%
JPMorgan Chase & Co 1.3%

VOO’s Top Holdings are Apple Inc, Microsoft Corp, Amazon.com Inc, Facebook Inc Class A, and Alphabet Inc Class A at 5.92%, 5.62%, 4.06%, 2.29%, and 2.02%.

Alphabet Inc Class C (1.97%), Tesla Inc (1.44%), and Berkshire Hathaway Inc Class B (1.44%) have a slightly smaller but still significant weight. NVIDIA Corp and JPMorgan Chase & Co are also represented in the VOO’s holdings at 1.37% and 1.3%.

IJR - 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%.

Performance

Annual Returns

VOO vs. IJR - Annual Returns

Year VOO IJR
2020 18.35% 11.24%
2019 31.46% 22.79%
2018 -4.42% -8.43%
2017 21.78% 13.2%
2016 11.93% 26.49%
2015 1.35% -2.0%
2014 13.63% 5.67%
2013 32.33% 41.36%
2012 15.98% 16.28%
2011 2.09% 0.9%
2010 0.0% 26.14%

VOO had its best year in 2013 with an annual return of 32.33%. VOO’s worst year over the past decade yielded -4.42% and occurred in 2018. In most years the Vanguard S&P 500 ETF provided moderate returns such as in 2016, 2014, and 2012 where annual returns amounted to 11.93%, 13.63%, and 15.98% respectively.

The year 2013 was the strongest year for IJR, returning 41.36% on an annual basis. The poorest year for IJR in the last ten years was 2018, with a yield of -8.43%. Most years the iShares Core S&P Small-Cap ETF has given investors modest returns, such as in 2020, 2017, and 2012, when gains were 11.24%, 13.2%, and 16.28% respectively.

Portfolio Growth

VOO vs. IJR - Portfolio Growth

Fund Initial Balance Final Balance CAGR
VOO $10,000 $36,575 14.45%
IJR $10,000 $30,759 13.97%

A $10,000 investment in VOO would have resulted in a final balance of $36,575. This is a profit of $26,575 over 10 years and amounts to a compound annual growth rate (CAGR) of 14.45%.

With a $10,000 investment in IJR, the end total would have been $30,759. This equates to a $20,759 profit over 10 years and a compound annual growth rate (CAGR) of 13.97%.

VOO’s CAGR is 0.48 percentage points higher than that of IJR and as a result, would have yielded $5,816 more on a $10,000 investment. Thus, VOO outperformed IJR by 0.48% annually.


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