The Vanguard Morningstar Small-Cap ETF (NYSEMKT:VB) and the iShares Morningstar Small-Cap ETF (NYSEMKT:ISCB) represent two low-cost avenues into the small-cap market, distinguished primarily by their vast difference in assets under management. U.S. small-capitalization stocks are often favored by investors looking to capture the growth potential of younger companies before they reach large-cap status. While these stocks can be more volatile than their blue chip counterparts, the diversification offered by exchange-traded funds helps mitigate individual company risk while maintaining exposure to the broader asset class.
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-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 a 0.03% expense ratio compared to 0.04% for its iShares counterpart. While both funds are competitive on cost, they differ significantly in their total assets under management. Growth of $1,000 over 5 years (total return) The Vanguard aims for similar broad coverage by tracking the CRSP U.S.
Small Cap Index, holding 1,306 stocks. Its sector weights tilt toward industrials at 20%, technology at 18%, and healthcare at 13%. Top holdings include Credo Technology Group Holding at 0.54%, Jabil at 0.49%, and Revolution Medicines at 0.45%.
The fund was also launched in 2004. Vanguard Morningstar Small-Cap ETF has paid $3.61 per share over the trailing 12 months, which, at its recent ~$308.54 share price, works out to a 1.2% yield. The iShares targets a broad range of U.S. small-capitalization companies.
Its portfolio currently features 1,575 holdings, including industrials at 17%, financial services at 17%, and healthcare at 15%. Its largest positions include Okta at 0.38%, Atlassian at 0.37%, and Guardant Health at 0.32%. The fund was launched in 2004. iShares Morningstar Small-Cap ETF has paid $0.95 per share over the trailing 12 months, which, at its recent ~$77.36 share price, works out to a 1.2% yield.
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