Which Small-Cap Value ETF Is Better: State Street's SLYV or iShares' ISCV?

The State Street SPDR S&P 600 Small Cap Value ETF (NYSEMKT:SLYV) and the iShares Morningstar Small-Cap Value ETF (NYSEMKT:ISCV) both target U.S. small-cap value stocks, but SLYV has shown stronger recent performance, while ISCV stands out for lower fees and broader diversification.

Both SLYV and ISCV aim to capture the U.S. small-cap value segment, but they do so with some notable differences in portfolio makeup, cost, and recent returns. This comparison unpacks those distinctions to help investors weigh which approach best suits their needs.

Snapshot (cost & size)

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

ISCV is more affordable, charging just 0.06% compared to SLYV’s 0.15%, and both ETFs currently offer a 2% dividend yield, making them similar in income potential but distinct in cost.

Performance & risk comparison

What's inside

ISCV tracks a diverse group of over 1,000 U.S. small-cap value stocks, with sector weights led by Financial Services (21%), Consumer Cyclical (14%), and Industrials (12%). Its largest positions, such as Moderna, CF Industries, and Alcoa, each make up less than 1% of the fund, supporting broad diversification. With a fund age of nearly 22 years, ISCV has an established track record and no special quirks or overlays.

SLYV, in contrast, holds around 460 companies and also skews toward Financial Services, Consumer Cyclical, and Industrials, with slightly higher weights in those sectors. Its top holdings include Eastman Chemical, Match Group, and LKQ, with similarly small position sizes. Both funds focus on value characteristics, but SLYV’s portfolio is more concentrated, which may impact volatility and sector exposure.

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What this means for investors

Since hitting the public markets, SLYV and ISCV have delivered annualized total returns of 9.3% and 8.7%, slightly lagging the S&P 500’s historical returns over time. Ultimately, I think both ETFs are solid choices for investors looking to gain exposure to U.S. small-cap value stocks, and their similar total returns support this view.

Both have reasonably low expense ratios, 2% dividend yields, 1.2 betas, hold hundreds of stocks, and have smashed the broader market over the last year. However, they take slightly different approaches to reach somewhat similar returns. SLYV merely seeks to track the returns of the S&P SmallCap 600 Value Index. Meanwhile, ISCV targets the deepest discounts through the Morningstar U.S. Small Value Extended Index. Also, the S&P SmallCap 600 Value Index has a profitability screen, where the Morningstar U.S. Small Value Extended Index does not, so ISCV may focus more on “deep” value.

Because the ETFs’ returns are similar, yet their investment strategies differ, it is up to investors interested in these two investment vehicles to choose which one best fits them. Personally, I like the added filter that ISCV stocks go through, so I would lean toward it when choosing between the two. Furthermore, its expense ratio is only 0.06% compared to SLYV’s 0.15%, making it marginally “cheaper,” which supports this decision. Realistically, for investors, both are fine.

Josh Kohn-Lindquist has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Moderna. The Motley Fool recommends LKQ and Match Group. The Motley Fool has a disclosure policy.