Which Small-Cap ETF Is Better: Vanguard's VB or iShares' ISCB?

Core Insights - The article compares two small-cap ETFs: Vanguard Small-Cap ETF (VB) and iShares Morningstar Small-Cap ETF (ISCB), highlighting their differences in cost, trading scale, and portfolio construction [1][2]. Cost and Size Comparison - VB has an expense ratio of 0.05%, while ISCB is slightly lower at 0.04% [3][4]. - As of December 12, 2025, VB's one-year return is 10.5%, compared to ISCB's 14.3% [3]. - VB has assets under management (AUM) of $163.3 billion, significantly larger than ISCB's $257.4 million [3][9]. Performance and Risk Analysis - Over the past five years, VB's maximum drawdown is 28.15%, while ISCB's is 29.94% [5]. - A $1,000 investment in VB would have grown to $1,493 over five years, compared to $1,480 for ISCB [5]. Portfolio Composition - ISCB holds approximately 1,540 stocks with sector allocations of 19% in industrials, 16% in technology, and 15% in financial services [6]. - VB contains around 1,357 stocks, with allocations of 20% in industrials and 18% in technology [7]. - Both funds exhibit broad diversification, but ISCB's portfolio is slightly broader and more evenly distributed [7]. Historical Performance - Despite ISCB's better performance in the last year, it has underperformed VB over the last 10 and 20 years [8]. - VB has compounded returns of 9.6% annually since 2004, while ISCB's returns are at 8.5% [10].