Vanguard Small-Cap Value ETF Tops State Street on Cost and Yield
Key Points
Vanguard Small-Cap Value ETF offers a significantly lower expense ratio of 0.05%.
State Street SPDR S&P 600 Small Cap Value ETF tracks a more concentrated index of 462 profitable companies versus 835 for its competitor.
Vanguard's ETF has demonstrated lower historical price volatility and a smaller maximum drawdown over the past five years.
- 10 stocks we like better than Vanguard Small-Cap Value ETF ›
Vanguard Small-Cap Value ETF (NYSEMKT:VBR) provides a lower expense ratio and better long-term returns than State Street SPDR S&P 600 Small Cap Value ETF (NYSEMKT:SLYV), which focuses on a smaller subset of profitable companies.
These two funds are popular choices for investors seeking small-cap value exposure, a segment known for higher volatility and long-term growth potential. While both target companies with low price-to-book and price-to-earnings ratios, they follow different indexes and offer distinct cost structures and liquidity profiles. Investors often use these vehicles to capture the value factor within the small-cap universe, hoping to benefit from a recovery in undervalued stocks.
Snapshot (cost & size)
| Metric | SLYV | VBR |
|---|---|---|
| Issuer | SPDR | Vanguard |
| Share price (as of June 30, 2026) | $109.11 | $242.99 |
| Expense ratio | 0.15% | 0.05% |
| 1-yr return (as of June 30, 2026) | 39.7% | 27.1% |
| Dividend yield | 1.8% | 1.8% |
| Beta | 0.99 | 0.96 |
| AUM | $4.8 billion | $65.5 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 slightly more affordable with its 0.05% expense ratio compared to the 0.15% charged by the State Street ETF.
Performance & risk comparison
| Metric | SLYV | VBR |
|---|---|---|
| Max drawdown (5 yr) | (28.7%) | (24.2%) |
| Growth of $1,000 over 5 years (total return) | $1,401 | $1,540 |
What's inside
The Vanguard ETF tracks the CRSP US Small Cap Value Index, which results in a broad portfolio of 835 holdings. This diversified approach helps mitigate risks associated with individual small-cap stocks. Its largest positions include Flex (NASDAQ:FLEX) at 1.25%, Jabil (NYSE:JBL) at 0.82%, and Tapestry (NYSE:TPR) at 0.66%. The fund was launched in 2004. It has paid $5.23 per share in dividends over the trailing 12 months.
SPDR’s fund tracks the S&P SmallCap 600 Value Index, holding 462 stocks. This index requires companies to meet specific profitability criteria before inclusion, which can act as a quality filter. Its largest positions include Molina Healthcare (NYSE:MOH) at 1.29%, Match Group (NASDAQ:MTCH) at 0.97%, and Eastman Chemical (NYSE:EMN) at 0.83%. The fund was launched in 2000. The SPDR ETF has paid $1.98 per share in dividends over the trailing 12 months.
For more guidance on ETF investing, check out the full guide at this link.
What this means for investors
It's hard to argue against Vanguard's various offerings. They tend to be conservative, very low-cost, and perform well. Vanguard's ETFs may not have splashy one-year returns, but over the long term, they put up results. (I own shares in various Vanguard ETFs, so that is likely coloring my opinion.)
Specifically comparing SLYV and VBR, there are some meaningful differences. VBR has a lower recent max drawdown, a better five-year return, and a lower expense ratio. It's also much larger than SLYV in terms of assets under management. One commonality is they're both extremely diversified; in both portfolios, only one position exceeds a 1% weighting. To me, VBR looks more attractive here.
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Erin Kennedy has no position in any of the stocks mentioned. The Motley Fool recommends Flex, Match Group, and Tapestry. The Motley Fool has a disclosure policy.
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