Small-Cap Value ETF Showdown: Vanguard's VBR vs. the State Street SLYV
Key Points
The Vanguard Morningstar Small-Cap Value ETF carries a significantly lower expense ratio than the State Street SPDR S&P 600 Small Cap Value ETF.
The State Street SPDR S&P 600 Small Cap Value ETF delivered stronger 1-year total returns but has a smaller asset base and deeper 5-year drawdown.
The Vanguard Morningstar Small-Cap Value ETF offers broader diversification with nearly twice as many holdings as its State Street competitor.
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The State Street SPDR S&P 600 Small Cap Value ETF (NYSEMKT:SLYV) and Vanguard Morningstar Small-Cap Value ETF (NYSEMKT:VBR) both target cheap small-cap stocks but differ in index methodology, portfolio size, and cost.
Small-cap value stocks can provide higher growth potential and essential diversification for broad-market portfolios, though they often come with higher volatility. While the State Street fund focuses on the S&P SmallCap 600 Value Index, the Vanguard fund tracks the CRSP US Small Cap Value Index, creating distinct risk-return profiles.
Snapshot (cost & size)
| Metric | SLYV | VBR |
|---|---|---|
| Issuer | State Street | Vanguard |
| Share price | $109.70 (as of 2026-08-20) | $247.49 (as of 2026-08-20) |
| Expense ratio | 0.15% | 0.05% |
| 1-yr return (as of 2026-08-20) | 32.4% | 24.3% |
| Dividend yield | 1.8% | 1.7% |
| Beta | 1.00 | 0.96 |
| AUM | $5.1 billion | $68.3 billion |
Beta measures price volatility relative to the S&P 500; beta is calculated from monthly returns over the available fund history (up to five years). The 1-year return represents total return over the trailing 12 months. Dividend yield is the trailing-12-month distribution yield.
The Vanguard fund is the more affordable option, sporting a 0.05% expense ratio compared to 0.15% for the State Street fund. Payouts are nearly identical, as the State Street fund holds a negligible lead in trailing-12-month dividend yield.
Performance & risk comparison
| Metric | SLYV | VBR |
|---|---|---|
| Max drawdown (5 yr) | (28.7%) | (24.2%) |
| Growth of $1,000 over 5 years (total return) | $1,507 | $1,628 |
What's inside
The Vanguard Morningstar Small-Cap Value ETF provides broad exposure to small-cap value through 841 holdings. Its sector concentrations include Financial Services at 18%, Industrials at 17%, and Consumer Cyclical at 14%. Its largest positions include Jabil Inc at 0.71%, Tapestry Inc at 0.66%, and Atmos Energy Corp at 0.61%. The fund was launched in 2004. The Vanguard Morningstar Small-Cap Value ETF has paid $4.32 per share over the trailing 12 months, which on its recent ~$247.49 share price works out to a 1.7% yield.
The State Street SPDR S&P 600 Small Cap Value ETF is more concentrated, holding 461 securities. It leans into Financial Services at 21%, Consumer Cyclical at 15%, and Industrials at 13%. The fund tracks the S&P SmallCap 600 Value Index, and its top holdings include Match Group Inc at 1.01%, Paycom Software Inc at 1.01%, and Jackson Financial Inc at 0.97%. The fund was launched in 2000. The State Street SPDR S&P 600 Small Cap Value ETF has paid $1.98 per share over the trailing 12 months, which on its recent ~$109.70 share price works out to a 1.8% yield.
For more guidance on ETF investing, check out the full guide at this link.
Which looks like the better buy
Unless your full-time job is to hunt for undervalued stocks among small-cap companies, it's hard to find a more efficient way to invest in this part of the stock market than an exchange-traded fund. The State Street SPDR S&P 600 Small Cap Value ETF (SLYV) and Vanguard Morningstar Small-Cap Value ETF (VBR) offer two compelling choices in this arena. Which to pick depends on the factors that matter most to you.
VBR is a good ETF for those who prioritize a low cost or high liquidity. Its AUM is far larger than SLYV, and it offers greater diversification with its more than 800 holdings. However, VBR's holdings slide into mid-cap territory. For example, U.S. Foods is among its top ten holdings, and the stock sports a market cap of about $23 billion.
SLYV's holdings are significantly smaller than VBR's because the index it's tracking employs a screen to find small-cap stocks exhibiting strong book value to price ratio, earnings to price ratio, and sales to price ratio. This helps to target compelling value companies. The fund also follows strict market-cap ceiling requirements, giving investors "purer" small-cap exposure. SLYV is the better ETF for investors who want a greater focus on small-cap equities.
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Robert Izquierdo has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Paycom Software. The Motley Fool recommends Match Group and Tapestry. The Motley Fool has a disclosure policy.
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