Investors often lean toward different ETF options like the Morningstar Small Cap Value ETF Shares (ISCV) and the iShares S&P Midcap 400 Value ETF (IJJ). They both embrace a value investing strategy in U.S. stocks, targeting distinct company sizes.
Essentially, ISCV concentrates on small-cap stocks that are viewed as undervalued, while IJJ targets mid-sized firms sharing similar characteristics.
Cost and Size Snapshots
| metric | ISCV | IJJ |
|---|---|---|
| Publisher | ishares | ishares |
| expense ratio | 0.06% | 0.18% |
| 1 year return (as of July 9, 2026) | 24.41% | 16.24% |
| dividend yield | 1.85% | 1.59% |
| beta | 1.02 | 0.96 |
| parrot | $685.2 million | $8.7 billion |
Beta indicates price volatility compared to the S&P 500 and is calculated based on five years of monthly performance. The one-year return reflects total returns for the upcoming 12 months, while the dividend yield measures the trailing 12-month distribution yield.
ISCV presents a more affordable option, boasting a lower expense ratio of 0.06% versus IJJ’s 0.18%. Additionally, ISCV delivers higher dividends at a yield of 1.85%, compared to IJJ’s 1.59%.
Performance and Risk Comparison
| metric | ISCV | IJJ |
|---|---|---|
| Maximum drawdown (5 years) | (25.34%) | (22.67%) |
| $1,000 growth in 5 years (total return) | $1,500 | $1,521 |
Portfolio Overview
Established in 2000, IJJ offers targeted exposure to 304 mid-market companies that are often undervalued. Its sector concentration includes financial services at 21.8%, industrial products at 19.1%, and consumer cyclical products at 14.0%. Notable holdings include American Foods (U.S.F.D.), at 1.3%, TD Synnex (SNX), at 1.2%, and Dependence (RS), at 1.1%.
In contrast, ISCV maintains a wider portfolio of 1,051 stocks, with top sector allocations being financial services at 22.4%, consumer cyclicals at 14.6%, and industrials at 12.7%. Key holdings for ISCV are Host Hotels & Resorts (HST), at 0.5%, Jazz Pharmaceuticals (Jazz), at 0.5%, and Aramark (Armuk), also at 0.5%. ISCV launched in 2004.
For thorough advice on ETF investing, refer to our detailed guide.
Implications for Investors
The decision between these two ETFs often boils down to whether an investor prefers exposure to small-cap or mid-cap stocks.
ISCV, with its extensive range of over 1,000 holdings, effectively spreads risk across numerous small, undervalued companies. Plus, with a cost of only 0.06%, it offers remarkable value for its targeted investment approach. The combination of low expense and diversification is quite appealing, especially for those seeking income.
On the other hand, IJJ gives the advantage of stability with its mid-cap focus. Generally, mid-cap stocks are known to perform better during turbulent times, which might be more comforting for investors wary of drastic swings typical in small-cap stocks.
Over the past year, small-cap stocks have shown strong performance, and ISCV’s results highlight that smaller companies can yield returns when market conditions are ripe for risk-taking. Yet, looking at a five-year horizon, both funds have displayed comparable performance—something that long-term investors should prioritize. While it can be tempting to follow recent high performers, focusing on cost and consistent returns often outweighs the allure of a single impressive year.
For those constructing a well-rounded portfolio, including both of these funds could be a smart move, particularly if their current investments lean heavily towards large-cap stocks.
