Vanguard VBR vs State Street SLYV: Which Small-Cap Value ETF Is the Better Buy?

Small-cap stocks should be a part of just about any well-balanced investment portfolio. Two to consider are State Street SPDR S&P 600 Small Cap Value ETF (NYSEMKT:SLYV), which offers higher recent returns and a slight yield edge, and the Vanguard Small-Cap Value ETF (NYSEMKT:VBR), which provides a lower expense ratio and broader diversification.

Small-cap value stocks offer a way to capture the size and value premiums historically observed in equity markets. This comparison examines whether the State Street fund’s concentrated, index-driven approach or the Vanguard fund’s ultra-low-cost, highly diversified portfolio better fits a long-term investment strategy.

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. Dividend yield is the trailing-12-month distribution yield as of the closing prices of the funds on June 12, 2026.

The Vanguard fund is the more affordable option, charging a 0.05% expense ratio compared to 0.15% for the State Street fund. While SLYV offers a slightly higher distribution yield, the difference between the two payouts remains marginal for most income-focused investors.

Performance & risk comparison

What's inside

Vanguard Small-Cap Value ETF holds 838 stocks, with Financial Services (18%), Industrials (17.9%), and Consumer Cyclical (12.5%) as its top sectors. Its largest positions include Flex (NASDAQ:FLEX) at 0.76%, Jabil (NYSE:JBL) at 0.77%, and NRG Energy (NYSE:NRG) at 0.75%. Launched in 2004, the fund has paid $4.14 per share over the trailing 12 months and manages $65.5 billion in assets under management (AUM).

In contrast, State Street SPDR S&P 600 Small Cap Value ETF tracks the S&P SmallCap 600 Value Index with 458 holdings. Its top sectors are Financial Services (19.5%), Consumer Cyclical (15.4%), and Technology (13.4%). Leading positions include Molina Healthcare (NYSE:MOH) at 1.04%, Enphase Energy (NASDAQ:ENPH) at 1.04%, and Eastman Chemical (NYSE:EMN) at 1.01%. Launched in 2000, it has a trailing-12-month dividend of $1.90 per share and $4.8 billion in AUM.

Which fund is the better buy?

The State Street SPDR S&P 600 Small Cap Value ETF has had a great recent 12 months, returning more than 39% to investors, besting the small-cap category by three percentage points. The Vanguard Small-Cap Value ETF has left a fair bit of returns on the table, relative to the category, with 28% returns over the past 12 months.

Yet small caps can and often do go out of favor in the market for long periods of time. Over the long-run Vanguard’s fund beats the State Street offering. Over the past three years, VBR has returned 16.5%, compared to 14.8% for SPLV and a category return of 15.3%. Over five years, VBR wins again, with returns of 7.8% to SLYV’s 6.5%. Over 10 years through March 31, the Vanguard fund posted a 10.1% return compared to 9.4% for the State Street contender.

In short, both funds offer strong performance and excellent exposure to the small-cap stock category. Given the historical trend of small caps to go out of favor for longer periods of time, the lower-cost Vanguard Small-Cap Value ETF is the choice here.

For more guidance on ETF investing, check out the full guide at this link.

Brendan Coffey has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends NRG Energy. The Motley Fool recommends Enphase Energy and Flex. The Motley Fool has a disclosure policy.