IJJ vs. VBR: Should Value Investors Choose Mid-Cap Stability or Small-Cap Growth Potential?

The iShares SP Mid-Cap 400 Value ETF (NYSEMKT:IJJ) and Vanguard Small-Cap Value ETF (NYSEMKT:VBR) disagree astir successful cost, size, and portfolio breadth -- with VBR offering overmuch little fees and astir triple the holdings, portion IJJ provides a mid-cap focus.

These 2 value-oriented exchange-traded funds purpose to seizure U.S. stocks trading beneath their estimated worth, but with antithetic approaches: IJJ targets mid-cap companies with worth characteristics, portion VBR tracks a broader small-cap worth index. Here’s however they stack up connected cost, performance, risk, and what’s inside.

Beta measures terms volatility comparative to the S&P 500; beta is calculated from five-year play returns. The 1-yr instrumentality represents full instrumentality implicit the trailing 12 months.

VBR stands retired arsenic the much affordable prime with a 0.07% disbursal ratio, compared to IJJ’s 0.18%.

VBR holds a sweeping portfolio of 840 stocks, focusing connected U.S. small-cap companies that conscionable worth criteria. The fund’s largest assemblage exposures are industrials (19%), fiscal services (18%), and user cyclicals (13%). Its apical holdings, including NRG Energy (NYSE:NRG), Sandisk (NASDAQ:SNDK), and EMCOR Group (NYSE:EME), each marque up little than 1% of assets, signaling wide diversification. With 21.9 years successful cognition and $59.6 cardinal successful assets nether absorption (AUM), VBR’s standard and index-tracking attack whitethorn entreaty to investors seeking wide marketplace sum astatine a debased cost.

IJJ, by contrast, concentrates connected mid-cap worth stocks, with the heaviest weights successful fiscal services (19%), industrials (15%), and user cyclicals (12%). IJJ’s 309 holdings make a much focused portfolio, perchance starring to antithetic hazard and instrumentality characteristics versus VBR’s broader, small-cap emphasis.

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IJJ and VBR some people undervalued American companies, but IJJ focuses connected mid-caps portion VBR goes smaller, creating fundamentally antithetic risk-return profiles for investors. The outgo quality is substantial. VBR charges conscionable 0.07% annually compared to IJJ's 0.18% disbursal ratio, meaning Vanguard's money costs little than fractional arsenic overmuch to own. Additionally, VBR dominates successful standard with astir $59.6 cardinal successful assets versus IJJ's $8 billion, reflecting its popularity among worth investors.