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Should Vanguard Small-Cap Value ETF (VBR) Be on Your Investing Radar?
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Launched on 01/26/2004, the Vanguard Small-Cap Value ETF (VBR - Free Report) is a passively managed exchange traded fund designed to provide a broad exposure to the Small Cap Value segment of the US equity market.
The fund is sponsored by Vanguard. It has amassed assets over $29.69 billion, making it the largest ETFs attempting to match the Small Cap Value segment of the US equity market.
Why Small Cap Value
Sitting at a market capitalization below $2 billion, small cap companies tend to be high-potential stocks compared to its large and mid cap counterparts, but come with higher risk.
Carrying lower than average price-to-earnings and price-to-book ratios, value stocks also have lower than average sales and earnings growth rates. While value stocks have outperformed growth stocks in nearly all markets when you consider long-term performance, growth stocks are more likely to outpace value stocks in strong bull markets.
Costs
Since cheaper funds tend to produce better results than more expensive funds, assuming all other factors remain equal, it is important for investors to pay attention to an ETF's expense ratio.
Annual operating expenses for this ETF are 0.07%, making it one of the least expensive products in the space.
It has a 12-month trailing dividend yield of 2.07%.
Sector Exposure and Top Holdings
ETFs offer a diversified exposure and thus minimize single stock risk but it is still important to delve into a fund's holdings before investing. Most ETFs are very transparent products and many disclose their holdings on a daily basis.
This ETF has heaviest allocation to the Financials sector--about 22.40% of the portfolio. Industrials and Consumer Discretionary round out the top three.
Looking at individual holdings, Smurfit Westrock Plc (SW - Free Report) accounts for about 0.78% of total assets, followed by Slcmt1142 and Williams-Sonoma Inc (WSM - Free Report) .
Performance and Risk
VBR seeks to match the performance of the CRSP U.S. Small Cap Value Index before fees and expenses. The CRSP U.S. Small Cap Value Index measures the investment return of small-capitalization value stocks.
The ETF has lost about -4.26% so far this year and was up about 5.14% in the last one year (as of 03/18/2025). In the past 52-week period, it has traded between $177.65 and $217.30.
The ETF has a beta of 1.15 and standard deviation of 19.57% for the trailing three-year period, making it a medium risk choice in the space. With about 843 holdings, it effectively diversifies company-specific risk.
Alternatives
Vanguard Small-Cap Value ETF holds a Zacks ETF Rank of 2 (Buy), which is based on expected asset class return, expense ratio, and momentum, among other factors. Because of this, VBR is a great option for investors seeking exposure to the Style Box - Small Cap Value segment of the market. There are other additional ETFs in the space that investors could consider as well.
The iShares Russell 2000 Value ETF (IWN - Free Report) and the Avantis U.S. Small Cap Value ETF (AVUV - Free Report) track a similar index. While iShares Russell 2000 Value ETF has $11.19 billion in assets, Avantis U.S. Small Cap Value ETF has $14.64 billion. IWN has an expense ratio of 0.24% and AVUV charges 0.25%.
Bottom-Line
While an excellent vehicle for long term investors, passively managed ETFs are a popular choice among institutional and retail investors due to their low costs, transparency, flexibility, and tax efficiency.
To learn more about this product and other ETFs, screen for products that match your investment objectives and read articles on latest developments in the ETF investing universe, please visit Zacks ETF Center.
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Should Vanguard Small-Cap Value ETF (VBR) Be on Your Investing Radar?
Launched on 01/26/2004, the Vanguard Small-Cap Value ETF (VBR - Free Report) is a passively managed exchange traded fund designed to provide a broad exposure to the Small Cap Value segment of the US equity market.
The fund is sponsored by Vanguard. It has amassed assets over $29.69 billion, making it the largest ETFs attempting to match the Small Cap Value segment of the US equity market.
Why Small Cap Value
Sitting at a market capitalization below $2 billion, small cap companies tend to be high-potential stocks compared to its large and mid cap counterparts, but come with higher risk.
Carrying lower than average price-to-earnings and price-to-book ratios, value stocks also have lower than average sales and earnings growth rates. While value stocks have outperformed growth stocks in nearly all markets when you consider long-term performance, growth stocks are more likely to outpace value stocks in strong bull markets.
Costs
Since cheaper funds tend to produce better results than more expensive funds, assuming all other factors remain equal, it is important for investors to pay attention to an ETF's expense ratio.
Annual operating expenses for this ETF are 0.07%, making it one of the least expensive products in the space.
It has a 12-month trailing dividend yield of 2.07%.
Sector Exposure and Top Holdings
ETFs offer a diversified exposure and thus minimize single stock risk but it is still important to delve into a fund's holdings before investing. Most ETFs are very transparent products and many disclose their holdings on a daily basis.
This ETF has heaviest allocation to the Financials sector--about 22.40% of the portfolio. Industrials and Consumer Discretionary round out the top three.
Looking at individual holdings, Smurfit Westrock Plc (SW - Free Report) accounts for about 0.78% of total assets, followed by Slcmt1142 and Williams-Sonoma Inc (WSM - Free Report) .
Performance and Risk
VBR seeks to match the performance of the CRSP U.S. Small Cap Value Index before fees and expenses. The CRSP U.S. Small Cap Value Index measures the investment return of small-capitalization value stocks.
The ETF has lost about -4.26% so far this year and was up about 5.14% in the last one year (as of 03/18/2025). In the past 52-week period, it has traded between $177.65 and $217.30.
The ETF has a beta of 1.15 and standard deviation of 19.57% for the trailing three-year period, making it a medium risk choice in the space. With about 843 holdings, it effectively diversifies company-specific risk.
Alternatives
Vanguard Small-Cap Value ETF holds a Zacks ETF Rank of 2 (Buy), which is based on expected asset class return, expense ratio, and momentum, among other factors. Because of this, VBR is a great option for investors seeking exposure to the Style Box - Small Cap Value segment of the market. There are other additional ETFs in the space that investors could consider as well.
The iShares Russell 2000 Value ETF (IWN - Free Report) and the Avantis U.S. Small Cap Value ETF (AVUV - Free Report) track a similar index. While iShares Russell 2000 Value ETF has $11.19 billion in assets, Avantis U.S. Small Cap Value ETF has $14.64 billion. IWN has an expense ratio of 0.24% and AVUV charges 0.25%.
Bottom-Line
While an excellent vehicle for long term investors, passively managed ETFs are a popular choice among institutional and retail investors due to their low costs, transparency, flexibility, and tax efficiency.
To learn more about this product and other ETFs, screen for products that match your investment objectives and read articles on latest developments in the ETF investing universe, please visit Zacks ETF Center.