IJR vs VB: The Epic Battle of Acronyms
LAST UPDATED: April 16, 2023 | By Conrad Golly
Hey there! If you’re reading this, it’s probably because you’re interested in the world of exchange-traded funds (ETFs).
And if you’re looking for a comparison between IJR and VB, then you’ve come to the right place!
That’s why I’m excited to dive into the differences between IJR and VB to help you make a more informed decision.
IJR vs VB: Before we get started, let me give you a brief overview. IJR and VB are both ETFs that track small-cap stocks.
While they have similar investment objectives, there are some key differences in their holdings, fees, and performance.
As someone who’s invested in ETFs before, I know how overwhelming it can be to choose the right one.
With so many options out there, it can be difficult to determine which ETF aligns with your investment goals.
So, let’s take a closer look and see which one comes out on top!
Table of Contents
What is IJR?
When it comes to investing in the stock market, exchange-traded funds (ETFs) have become a popular choice for many investors. One such ETF is IJR, which stands for iShares Core S&P Small-Cap ETF.
As the name implies, IJR focuses on small-cap stocks, which are companies with a market capitalization between $300 million and $2 billion.
These smaller companies are often considered riskier investments, but they can also offer the potential for higher returns. IJR is managed by BlackRock, one of the largest investment management companies in the world.
The ETF was launched in 2000 and has since grown to hold over 1,200 small-cap stocks. One of the advantages of investing in IJR is its low expense ratio, which is the annual fee that investors pay to own the ETF.
As of the current date, IJR’s expense ratio is 0.06%, which is lower than the average expense ratio for similar ETFs.
IJR also offers investors exposure to a diverse range of industries, including healthcare, technology, and consumer goods. This diversification can help reduce the overall risk of the portfolio.
IJR can be a good option for investors who are looking to add small-cap stocks to their portfolio while keeping costs low.
However, as with any investment, it’s important to do your own research and consider your own financial goals and risk tolerance before investing.
What is VB?
As I was researching for the best investment option between IJR and VB, I realized that not everyone might know what VB is. Let me break it down for you.
VB stands for Vanguard Small-Cap ETF. It is an exchange-traded fund that focuses on investing in small-cap stocks. Small-cap stocks are companies with a market capitalization between $300 million and $2 billion.
They are generally considered riskier than large-cap stocks, but they also have the potential for higher returns.
VB was launched on January 26, 2004, and has since then grown to become one of the most popular small-cap ETFs in the market. It has an expense ratio of 0.05%, which is lower than the average expense ratio of similar ETFs.
One of the things that makes VB unique is its investment strategy. It tracks the performance of the CRSP US Small Cap Index, which includes over 1,500 small-cap stocks.
This means that VB provides investors with exposure to a wide range of small-cap companies across various sectors. In terms of performance, VB has historically outperformed its benchmark index.
Over the past ten years, it has provided an average annual return of 14.38%, compared to the index’s return of 13.71%.
However, past performance is not a guarantee of future results, so it’s important to do your own research before making any investment decisions.
VB is a solid investment option for those looking to invest in small-cap stocks.
Its low expense ratio, wide range of holdings, and strong historical performance make it a popular choice among investors.
Differences between IJR vs VB
Performance IJR vs VB
When it comes to performance, IJR and VB have some key differences. Over the past ten years, VB has provided higher returns than IJR.
However, IJR has a higher exposure to the industrials sector, which could be a deciding factor for some investors.
Additionally, IJR has a higher standard deviation, which means that it has more volatility than VB.
To help you better understand the performance differences between IJR and VB, take a look at the table below:
| ETF | Expense Ratio | Exposure to Industrials Sector | Standard Deviation | Past 10-Year Returns |
|---|---|---|---|---|
| IJR | 0.06% | 16.91% | 17.23% | 10.56% |
| VB | 0.05% | 14.11% | 16.17% | 11.77% |
Features
When it comes to features, IJR and VB have some differences worth noting. IJR has a slightly higher expense ratio than VB, which could be a deciding factor for some investors.
Additionally, IJR has a higher turnover rate than VB, which means that it buys and sells its holdings more frequently. This could result in higher transaction costs for investors.
On the other hand, VB has a larger asset base than IJR, which means that it may be more liquid and easier to trade.
Additionally, VB has a lower tracking error than IJR, which means that it does a better job of tracking its underlying index.
Ease of Use
When it comes to ease of use, IJR and VB are fairly similar. Both ETFs are easy to buy and sell, and both have low expense ratios.
Additionally, both ETFs are passively managed, which means that they aim to replicate the performance of their underlying index as closely as possible.
One potential difference worth noting is that IJR has a slightly higher minimum investment requirement than VB. However, this may not be a deciding factor for most investors.
Which One is Better?
Now that we’ve compared IJR and VB, it’s time to answer the question that’s been on everyone’s mind: which one is better?
As with most things in life, the answer is not so simple. It really depends on your investment goals and risk tolerance.
Let’s take a look at the pros and cons of both IJR and VB:
| IJR | VB | |
|---|---|---|
| Pros | Lower expense ratio Higher exposure to industrials sector Higher standard deviation | Lower standard deviation Higher dividend yield More diversified portfolio |
| Cons | Lower returns over the past ten years Higher expense ratio compared to VB Higher risk due to higher standard deviation | Higher expense ratio compared to IJR Lower exposure to industrials sector Lower returns compared to IJR |
Personally, I tend to lean towards IJR due to its lower expense ratio and higher exposure to the industrials sector.
However, if you’re looking for a more diversified portfolio and don’t mind a slightly higher expense ratio, VB may be the way to go.
At the end of the day, it’s important to do your own research and determine which ETF aligns best with your investment goals and risk tolerance.
Don’t just blindly follow the advice of others or chase after the latest investment fad. Invest wisely and stay true to your own personal investment strategy.
IJR vs VB: My Preference
As someone who has used both IJR and VB extensively, I have to say that I prefer IJR overall. While VB has its advantages, I find that IJR is a better fit for my needs and preferences.
One of the main reasons I prefer IJR is its simplicity.
I find that IJR is much easier to use and navigate than VB.
The interface is cleaner and more intuitive, and I can quickly find what I need without having to dig through multiple menus and options.
Another advantage of IJR is its performance.
I find that IJR is faster and more responsive than VB, especially when working with larger datasets. This can be a huge time-saver, especially when working on tight deadlines.
Of course, there are some areas where VB excels.
For example, VB has more advanced charting and graphing capabilities, which can be useful for creating complex visualizations. Additionally, VB has more built-in functions and tools, which can be helpful for certain tasks.
That being said, I find that the benefits of IJR outweigh those of VB for my particular needs. IJR is simpler, faster, and more intuitive, which makes it a better fit for my workflow.
Of course, everyone’s needs and preferences are different, so it’s important to try out both IJR and VB to see which one works best for you.
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