Which Is the Better Small-Cap Value ETF, Vanguard's VBR or State Street's SLYV?
Key Points
The Vanguard Small-Cap Value ETF offers a lower expense ratio and larger assets under management than the State Street SPDR S&P 600 Small Cap Value ETF.
The State Street SPDR S&P 600 Small Cap Value ETF has delivered higher total returns over the last year but shows a higher beta and deeper maximum drawdown.
The Vanguard Small-Cap Value ETF maintains a much broader portfolio with 841 holdings compared to 459 holdings for State Street SPDR S&P 600 Small Cap Value ETF.
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The Vanguard Small-Cap Value ETF (NYSEMKT:VBR) and State Street SPDR S&P 600 Small Cap Value ETF (NYSEMKT:SLYV) both target inexpensive small-cap stocks, but they differ significantly in portfolio breadth, cost, and historical volatility.
Both funds seek to provide exposure to small companies that trade at low valuations relative to their fundamentals. While they share a similar objective, their index methodologies and expense structures create distinct risk-reward profiles for investors looking to diversify away from large-cap dominance.
Snapshot (cost & size)
| Metric | VBR | SLYV |
|---|---|---|
| Issuer | Vanguard | SPDR |
| Expense ratio | 0.05% | 0.15% |
| 1-yr return (as of April 30, 2026) | 31.70% | 43.30% |
| Dividend yield | 1.91% | 2.01% |
| Beta | 0.98 | 1.01 |
| AUM | $60.7 billion | $4.6 billion |
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. Dividend yield is the trailing-12-month distribution yield.
The Vanguard fund is significantly more affordable, sporting an expense ratio of 0.05% compared to 0.15% for the SPDR fund. State Street’s funds currently offers a slightly higher trailing-12-month dividend yield of 2.01%.
Performance & risk comparison
| Metric | VBR | SLYV |
|---|---|---|
| Max drawdown (5 yr) | (24.20%) | (28.70%) |
| Growth of $1,000 over 5 years (total return) | $1,498.0 | $1,373.0 |
What's inside
State Street SPDR S&P 600 Small Cap Value ETF tracks a subset of the S&P SmallCap 600, focusing on sectors such as financial services (20%), consumer cyclical (16%), and industrials (13%). With 459 holdings, among its largest positions include Eastman Chemical (NYSE:EMN) at 1.02%, Match Group (NASDAQ:MTCH) at 1.00%, and LKQ (NASDAQ:LKQ) at 0.95%.
This SPDR fund, which was launched in 2000, seeks companies with specific book-to-price and sales-to-price ratios. It has paid $1.90 per share over the trailing 12 months.
Vanguard Small-Cap Value ETF follows the CRSP US Small Cap Value Index and maintains a much larger pool of 841 holdings. Its sector allocation is led by financial services (18%), industrials (17%), and consumer cyclical (13%). Top holdings include NRG Energy (NYSE:NRG) at 0.74%, Atmos Energy (NYSE:ATO) at 0.73%, and Tapestry (NYSE:TPR) at 0.68%.
Launched in 2004, the Vanguard fund provides broader diversification within the small-cap value space. It has a trailing-12-month dividend of $4.14 per share, providing a comparable yield on its higher share price.
For more guidance on ETF investing, check out the full guide at this link.
What this means for investors
Investing in value stocks is a strategy Warren Buffet long espoused, while small-cap companies offer the potential for strong growth as these businesses expand. Combining these two characteristics can lead to outsized returns. That’s what the State Street SPDR S&P 600 Small Cap Value ETF (SLYV) and Vanguard Small-Cap Value ETF (VBR) strive to achieve, but choosing between these two comes down to a few key factors.
SLYV focuses on small-cap stocks exhibiting strong book value to price ratio, earnings to price ratio, and sales to price ratio. This leads to a smaller universe of 459 holdings, but they are arguably high-quality companies thanks to the fund’s screening. This contributed to SLYV’s superior one-year return, but the tradeoff is a much higher expense ratio.
VBR offers a far larger set of holdings at 841, which provides greater diversification. This helped the ETF deliver a lower max drawdown compared to SLYV, leading to a better return over the last five years. VBR’s low expense ratio is another plus, and these factors help to make the fund a good choice for investors who want to buy and hold for the long term.
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Robert Izquierdo has no position in any of the stocks mentioned. The Motley Fool recommends LKQ, Match Group, and Tapestry. The Motley Fool has a disclosure policy.
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