ISCV vs. VBR: Which Small Cap Value Approach is Right for Investors?
Key Points
ISCV carries a nearly identical expense ratio to VBR but holds fewer assets and has wider bid-ask spreads
Recent performance and risk metrics are closely matched, though ISCV experienced a slightly deeper drawdown during downturns
ISCV tilts more toward financial services and consumer cyclicals, while VBR leans on industrials
- 10 stocks we like better than iShares Trust - iShares Morningstar Small-Cap Value ETF ›
The Vanguard Small-Cap Value ETF (NYSEMKT:VBR) and iShares Morningstar Small-Cap Value ETF (NYSEMKT:ISCV) 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)
| Metric | VBR | ISCV |
|---|---|---|
| Issuer | Vanguard | IShares |
| Expense ratio | 0.05% | 0.06% |
| 1-yr return (as of 2026-03-11) | 17.9% | 18.3% |
| Dividend yield | 1.9% | 2.0% |
| Beta | 1.00 | 1.03 |
| AUM | $62.3 billion | $594.6 million |
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
| Metric | VBR | ISCV |
|---|---|---|
| Max drawdown (5 y) | -24.20% | -25.35% |
| Growth of $1,000 over 5 years | $1,279 | $1,194 |
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(NASDAQ:MRNA), CF Industries Holdings Inc(NYSE:CF), and Viatris Inc(NASDAQ:VTRS). 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(NASDAQ:SNDK), EMCOR Group Inc(NYSE:EME), and NRG Energy Inc(NYSE:NRG). VBR’s portfolio is more concentrated in industrials and has significantly greater AUM, which can help with liquidity and trading costs.
For more guidance on ETF investing, check out the full guide at this link.
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.
Should you buy stock in iShares Trust - iShares Morningstar Small-Cap Value ETF right now?
Before you buy stock in iShares Trust - iShares Morningstar Small-Cap Value ETF, consider this:
The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and iShares Trust - iShares Morningstar Small-Cap Value ETF wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.
Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $513,407!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,123,237!*
Now, it’s worth noting Stock Advisor’s total average return is 938% — a market-crushing outperformance compared to 188% for the S&P 500. Don't miss the latest top 10 list, available with Stock Advisor, and join an investing community built by individual investors for individual investors.
See the 10 stocks »
*Stock Advisor returns as of March 17, 2026.
Jake Lerch has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends EMCOR Group and Moderna. The Motley Fool has a disclosure policy.
Recommended Articles
