When deciding between the Vanguard Small Cap Value ETF (VBR 0.92%) and the iShares Morningstar Small Cap Value ETF (ISCV 0.93%), investors might want to consider a few key factors. The Vanguard fund typically has lower costs and better long-term performance, while the iShares fund offers a wider selection of stocks and a marginally higher yield.
Small-cap value stocks can be a nice way to balance portfolios that are heavily weighted in large-cap growth stocks. While both VBR and ISCV focus on this niche market segment, they stand out in aspects such as index strategies, costs, and liquidity profiles. Many investors are attracted to these funds for their potential to highlight value in smaller, agile companies that might otherwise fly under the radar. This comparison looks into how these two funds manage risk, generate income, and provide growth prospects in the small-cap arena.
Snapshots (cost and size)
| metric | VBR | ISCV |
|---|---|---|
| Publisher | Vanguard | iShares |
| expense ratio | 0.05% | 0.06% |
| 1 year return (as of 30/04/26) | 31.7% | 34.1% |
| dividend yield | 1.9% | 2.03% |
| beta | 1.13 | 1.2 |
| assets | $60.7 billion | $649 million |
Beta gives an idea of how much the price volatility compares to the S&P 500. It’s based on five years of monthly returns. The return quoted for one year reflects total returns for the accompanying twelve months. The dividend yield derives from the trailing twelve months.
The Vanguard fund has a slight edge in terms of cost, with a 0.05% expense ratio alongside ISCV’s 0.06%. Though the difference in basis points may seem negligible, it can be notably impactful for investors holding these diversified small-cap portfolios over the long run. When it comes to income, iShares’ fund offers a bit higher trailing dividend yield. While both funds focus on steady income, their main aim is to achieve capital growth through value-oriented choices. Those seeking slightly better cash flow might prefer the iShares fund, but the larger size of the Vanguard fund could translate into better trading conditions for major retail and institutional orders.
Comparing performance and risk
| metric | VBR | ISCV |
|---|---|---|
| Maximum drawdown (5 years) | (24.2%) | (25.3%) |
| $1,000 growth in 5 years (total return) | $1,499 | $1,422 |
What’s inside
The iShares Morningstar Small Cap Value ETF covers a diverse portfolio of 1,072 stocks, offering a wider scope than many of its counterparts. Its sector breakdown shows a significant focus on financial services at 23.5%, with industrials at 13%, and cyclicals at 12.7%. Key holdings include CF Industries at 0.63%, Obintiv at 0.57%, and TD Synnex at 0.57%. Established in 2004, it has paid an average of $1.41 per share over the last 12 months.
iShares Trust – iShares Morningstar Small Cap Value ETF
Today’s changes
(-0.93%) $-0.69
current price
$73.61
Key data points
daily range
$73.55 – $74.43
52 week range
$57.17 – $75.29
volume
9.6K
On the other hand, the Vanguard Small Cap Value ETF follows a more focused path with 838 total holdings. Its sector allocation includes 21.6% in industrials, 18% in financial services, and 14% in cyclical sectors. Major names in this fund are NRG Energy at 0.75%, Atmos Energy at 0.74%, and Tapestry Co., Ltd. at 0.69%. Like ISCV, this Vanguard fund was also established in 2004, but has a trailing dividend of $4.14 per share.
Vanguard Small Cap Value ETF
Today’s changes
(-0.92%) $-2.12
current price
$229.65
Key data points
daily range
$228.91 – $232.22
52 week range
$181.09 – $235.48
volume
341K
If you’re seeking more information about ETF investing, you might find our comprehensive guide useful.
What this means for investors
For those keen on diversifying their portfolios while focusing on large-cap stocks, small-cap ETFs like VBR or ISCV could be worth considering. VBR has a significantly larger asset base than ISCV and a slightly lower expense ratio, which is helpful. Meanwhile, ISCV offers a broad mix of stocks, and its dividend yield is a notch higher. As of April 30th, it has also outperformed slightly compared to last year. Generally, more assets can lead to better liquidity and lower costs, which is appealing for investors interested in preserving capital—plus, VBR has experienced lower maximum drawdowns in the last five years.
The distinct indexing strategies of these ETFs might also influence decisions. VBR leans more heavily on industrial stocks, while ISCV focuses on financial services. Both funds can be seen as reliable investments regardless of market conditions. Ultimately, the choice between them may hinge on individual preferences and the specific stocks they contain.
