IJR vs. VB: How These Popular Small-Cap ETFs Compare on Fees, Returns, and Diversification
Key Points
IJR carries a slightly higher expense ratio than VB but has outperformed over the past year.
Both funds show closely matched risk and drawdown profiles.
IJR holds fewer stocks with a modest tilt toward financials, while VB is more diversified.
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The Vanguard Small-Cap ETF (NYSEMKT:VB) and the iShares Core S&P Small-Cap ETF (NYSEMKT:IJR) both aim to capture the returns of U.S. small-cap stocks through full replication of their respective indexes.
This comparison focuses on cost, recent performance, risk, liquidity, and portfolio construction to help investors weigh which approach may better fit their needs.
Snapshot (cost & size)
| Metric | VB | IJR |
|---|---|---|
| Issuer | Vanguard | iShares |
| Expense ratio | 0.03% | 0.06% |
| 1-yr return (as of April 24, 2026) | 36.48% | 40.39% |
| Dividend yield | 1.34% | 1.29% |
| Beta (5Y monthly) | 1.23 | 1.20 |
| Assets under management (AUM) | $164.6 billion | $101.1 billion |
Beta measures price volatility relative to the S&P 500; beta is calculated from five-year monthly returns. The 1-yr return represents total return over the trailing 12 months.
VB is more affordable with a slightly lower expense ratio. The two funds offer very similar dividend yields, making cost the primary differentiator on this front.
Performance & risk comparison
| Metric | VB | IJR |
|---|---|---|
| Max drawdown (5 y) | -28.16% | -28.01% |
| Growth of $1,000 over 5 years (total returns) | $1,368 | $1,323 |
What's inside
IJR tracks a U.S. small-cap index, holding 641 stocks. Around 16% of assets are allocated to the financial services sector, followed by industrials and technology. Its largest positions are FormFactor, Viavi Solutions, and Sanmina, each accounting for less than 1% of assets. The fund has a long history, at nearly 26 years old, and aims for broad but not exhaustive small-cap coverage.
VB, by contrast, is more diversified with just over 1,300 holdings and a slightly different sector mix: industrials at 20%, followed by technology and financial services. Its top holdings — EMCOR Group, NRG Energy, and Atmos Energy — each account for less than 0.5% of the portfolio. Both funds avoid leverage or other structural quirks.
For more guidance on ETF investing, check out the full guide at this link.
What this means for investors
While IJR and VB both focus on small-cap stocks and share many similarities, their differences in diversification and sector allocations could make them appealing to different types of investors.
The two funds offer similar one- and five-year total returns, though IJR has edged slightly ahead of VB over the last 12 months. With nearly identical max drawdowns and betas, they’ve also experienced roughly the same level of volatility in recent years.
VB has a marginal advantage on both fees and income, with a slightly lower expense ratio and higher dividend yield. This could make a difference for long-term investors and those with large account balances, especially given how similar these funds are in terms of performance.
VB is the broader of the two, covering a much larger swath of the small-cap segment. It also has a slightly greater focus on industrials stocks, whereas IJR targets financial services as its top sector. This hasn’t necessarily translated into a difference in performance or risk, but it could matter for those aiming to balance their portfolios with exposure to specific sectors.
Deciding between these two ETFs will depend primarily on your personal investing preferences and goals. VB offers more diversification, lower fees, and a marginally higher dividend yield. IJR, on the other hand, offers greater exposure to financial services and a slightly higher one-year total return.
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Katie Brockman has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends EMCOR Group, Viavi Solutions, and iShares Core S&P Small-Cap ETF. The Motley Fool has a disclosure policy.
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