VBR outperforms SLYV on costs while tracking a broader small-cap value index, as investors rotate into the segment amid large-cap overvaluation.
The Vanguard Small-Cap Value ETF (VBR) has gained attention for its lower fees and strong performance, tracking the CRSP US Small Cap Value index. The fund excludes micro-caps but includes some mid-cap stocks, offering a distinct value proposition compared to peers like State Street’s SLYV, which follows the S&P 600 Small Cap Value index.
Small-cap value stocks have surged this year, with the Russell 2000 Value index rising 21% year-to-date and 35% over the past 12 months. This outpaces major benchmarks, including the S&P 500 and Nasdaq, as investors seek alternatives to overvalued large-cap stocks.
VBR and SLYV differ in methodology, with Vanguard’s approach applying additional value screens. Both funds reflect growing demand for small-cap exposure, though VBR’s cost advantage may appeal to cost-conscious investors.