IJR vs. VB: Which Small-Cap ETF Is the Better Buy for Investors?
Key Points
IJR carries a slightly higher fee than VB.
VB provides broader exposure, holding more than twice as many stocks as IJR.
While both funds have similar risk profiles, IJR posted the stronger 1-year total return.
The iShares Core S&P Small-Cap ETF (NYSEMKT:IJR) gives investors concentrated exposure to the S&P SmallCap 600, while the Vanguard Small-Cap ETF (NYSEMKT:VB) offers a broader, lower-cost slice of the small-cap market.
Investors looking for small-company growth often compare these two funds. Both target smaller U.S. companies, but their underlying indexes and stock-selection rules lead to different holdings counts and sector tilts -- which affects how they perform across different market cycles.
Snapshot (cost & size)
| Metric | VB | IJR |
|---|---|---|
| Issuer | Vanguard | iShares |
| Expense ratio | 0.03% | 0.06% |
| 1-year return (as of July 8, 2026) | 23.73% | 29.95% |
| Dividend yield | 1.19% | 1.11% |
| Beta | 1.10 | 1.08 |
| AUM | $188.6 billion | $111.3 billion |
Beta measures price volatility relative to the S&P 500; beta is calculated from five-year monthly returns. The 1-year return represents total return over the trailing 12 months. Dividend yield is the trailing-12-month distribution yield.
VB is the cheaper option, with a 0.03% expense ratio compared to IJR’s 0.06%. Both funds offer comparable dividend yields of roughly 1.1% to 1.2%.
Performance & risk comparison
| Metric | VB | IJR |
|---|---|---|
| Max drawdown (5 yr) | (28.16%) | (28.01%) |
| Growth of $1,000 over 5 years (total return) | $1,445 | $1,430 |
What's inside
Launched in 2000, IJR tracks the S&P SmallCap 600 Index and holds 652 stocks. Its largest sector weights include financial services at 17.0%, industrials at 15.6%, and technology at 15.5%. Its top equity positions include FormFactor (NASDAQ:FORM) (NYSE:FORM) at 0.7%, Viasat (NASDAQ:VSAT) at 0.7%, and Molina Healthcare (NYSE:MOH) at 0.6%.
VB tracks the CRSP US Small Cap Index and holds a much larger portfolio of 1,310 stocks. Its top sector weights include industrials at 20.6%, technology at 19.3%, and financial services at 12.3%. The fund’s largest holdings include Flex (NASDAQ:FLEX) at 0.7%, Astera Labs (NASDAQ:ALAB) at 0.6%, and Ciena (NYSE:CIEN) at 0.5%. VB was launched in 2004.
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What this means for investors
The main difference between these two funds comes down to a familiar trade-off: concentration versus breadth. IJR's tighter focus on the S&P SmallCap 600 -- an index with built-in profitability screens -- has helped it edge out VB over the past year, and that quality filter is worth noting. Vanguard's CRSP-based index doesn't screen for profitability in the same way, which means VB captures a wider swath of the small-cap universe, including younger or less established companies that IJR would leave out.
IJR’s recent outperformance shouldn’t be read as a permanent edge. Small-cap ETFs like these can swing significantly depending on where the market cycle stands -- IJR's profitability tilt should help it hold up relatively better when investors get cautious, while VB's broader net can capture more upside when smaller, riskier names rally.
For cost-conscious investors, VB's rock-bottom 0.03% expense ratio is hard to beat, and its much larger holdings count gives investors exposure to a wider slice of the small-cap market. For those willing to pay a few extra basis points, IJR's quality screen has historically added a bit of ballast during rockier stretches. Either way, both funds offer a straightforward, low-cost way to add small-cap exposure to investors’ portfolios
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Andy Gould has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Ciena and iShares Core S&P Small-Cap ETF. The Motley Fool recommends Astera Labs and Flex. The Motley Fool has a disclosure policy.
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