ISCV vs. VBR: Which Small Cap Value Approach is Right for Investors?

Core Insights - The Vanguard Small-Cap Value ETF (VBR) and iShares Morningstar Small-Cap Value ETF (ISCV) both focus on U.S. small-cap value stocks, with ISCV offering a slightly higher yield and greater exposure to financial services, but with significantly smaller assets under management [1][2]. Cost and Size Comparison - VBR has an expense ratio of 0.05% while ISCV has a slightly higher expense ratio of 0.06% [3]. - As of March 2026, VBR's one-year return is 17.9% compared to ISCV's 18.3% [3]. - VBR offers a dividend yield of 1.9%, while ISCV provides a yield of 2.0% [3]. - VBR has assets under management (AUM) of $62.3 billion, significantly larger than ISCV's $594.6 million [3]. Performance and Risk Comparison - Over the past five years, VBR experienced a maximum drawdown of -24.20%, while ISCV had a drawdown of -25.35% [5]. - An investment of $1,000 in VBR would have grown to $1,279 over five years, compared to $1,194 for ISCV [5]. Portfolio Composition - ISCV holds 1,078 companies, with a significant tilt towards financial services (21%), consumer cyclicals (14%), and industrials (13%) [6]. - VBR's portfolio is concentrated in industrials (19%), financial services (18%), and consumer cyclicals (13%), with major holdings including Sandisk Corp, EMCOR Group Inc, and NRG Energy Inc [7]. Investor Implications - Both VBR and ISCV provide diversified exposure to U.S. small-cap stocks, but they differ in key metrics such as performance, yield, and liquidity [8]. - VBR's larger AUM facilitates easier trading, especially during volatile market conditions, and it has a lower expense ratio compared to ISCV [9].