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

**The Vanguard Small-Cap Value ETF **(VBR +1.39%) and iShares Morningstar Small-Cap Value ETF (ISCV +0.70%) both target U.S. small-cap value stocks, but ISCV offers a marginally higher yield, heavier exposure to financial services, and much smaller assets under management (AUM).

Both VBR and ISCV appeal to investors seeking broad exposure to domestic small-cap companies with value-oriented valuations. This comparison examines their costs, recent returns, risk, liquidity, and portfolio composition to help determine which may fit specific investing goals.

Snapshot (cost & size)

Beta measures price volatility relative to the S&P 500; beta is calculated from five-year monthly returns. The 1-yr return represents total return over the trailing 12 months.

ISCV’s expense ratio is just slightly above VBR’s, making both funds highly affordable, and ISCV’s yield is a touch higher, which may appeal to income-focused investors.

Performance and risk comparison

What’s inside

ISCV tracks small-cap U.S. stocks screened for value, holding 1,078 companies as of March 2026. The fund tilts most heavily toward financial services (21%), consumer cyclicals (14%), and industrials (13%), with top positions in Moderna Inc(MRNA +1.39%), CF Industries Holdings Inc(CF +2.93%), and Viatris Inc(VTRS +1.89%). ISCV has a long track record of 21.7 years, but remains relatively small in assets under management.

VBR, by contrast, is anchored in industrials (19%), financial services (18%), and consumer cyclicals (13%). Its largest holdings include Sandisk Corp(SNDK +0.21%), EMCOR Group Inc(EME +0.41%), and NRG Energy Inc(NRG +1.00%). VBR’s portfolio is more concentrated in industrials and has significantly greater AUM, which can help with liquidity and trading costs.

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What this means for investors

The Vanguard Small-Cap Value ETF (VBR) and iShares Morningstar Small-Cap Value ETF (ISCV)are both exchange-traded funds that provide diversified exposure to U.S. small-cap stocks.

However, there are some important differences between them.

On some key metrics, ISCV comes out on top. The fund boasts better one-year performance (18.3% vs. 17.9%) and a higher dividend yield (2.0% vs. 1.9%). Yet, in other important ways, VBR excels.

VBR, for example, boasts a much higher amount of AUM ($62 billion vs. $0.6 billion). This is a significant difference, and it means that investors may find it easier to trade in and out of VBR than ISCV — particularly in times of heightened volatility. In addition, VBR has a slightly lower expense ratio (0.05% vs. 0.06%). Lastly, VBR has experienced a slightly smaller maximum drawdown over the last five years (-24.20% vs. -25.35%).

In summary, both funds are worth considering for investors seeking exposure to U.S. small-cap value stocks. The choice ultimately comes down to which characteristics an individual investor prioritizes.