Looking for broad exposure to the Small Cap Value segment of the US equity market? You should consider the iShares Morningstar Small-Cap Value ETF (ISCV Quick QuoteISCV - Free Report) , a passively managed exchange traded fund launched on June 28, 2004.

The fund is sponsored by Blackrock. It has amassed assets over $504.91 million, making it one of the average sized ETFs attempting to match the Small Cap Value segment of the US equity market.

Why Small Cap Value

Small cap companies have market capitalization below $2 billion. They usually have higher potential than large and mid cap companies with stocks but higher risk.

While value stocks have lower than average price-to-earnings and price-to-book ratios, they also have lower than average sales and earnings growth rates. Considering long-term performance, value stocks have outperformed growth stocks in almost all markets; however, they are more likely to underperform growth stocks in strong bull markets.

Costs

Expense ratios are an important factor in the return of an ETF and in the long term, cheaper funds can significantly outperform their more expensive counterparts, other things remaining the same.

Annual operating expenses for this ETF are 0.06%, making it the least expensive products in the space.

It has a 12-month trailing dividend yield of 2.04%.

Sector Exposure and Top Holdings

While ETFs offer diversified exposure, which minimizes single stock risk, a deep look into a fund's holdings is a valuable exercise. And, most ETFs are very transparent products that disclose their holdings on a daily basis.

This ETF has heaviest allocation to the Financials sector -- about 24% of the portfolio. Consumer Discretionary and Industrials round out the top three.

Looking at individual holdings, Skyworks Solutions Inc (SWKS) accounts for about 0.47% of total assets, followed by Annaly Capital Management Reit Inc (NLY) and Toll Brothers Inc (TOL).

The top 10 holdings account for about 4.4% of total assets under management.

Performance and Risk

ISCV seeks to match the performance of the MORNINGSTAR US SML CP BRD VLUE EXTD INDX before fees and expenses. The Morningstar US Small Cap Broad Value Extended Index comprises of small-capitalization U.S. equities that exhibit value characteristics.

The ETF has added about 2.21% so far this year and is up about 7.68% in the last one year (as of 08/21/2025). In the past 52-week period, it has traded between $51.37 and $69.50.

The ETF has a beta of 1.10 and standard deviation of 21.26% for the trailing three-year period. With about 1140 holdings, it effectively diversifies company-specific risk.

Alternatives

iShares Morningstar 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, ISCV is an outstanding 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) and the Vanguard Small-Cap Value ETF (VBR) track a similar index. While iShares Russell 2000 Value ETF has $11.28 billion in assets, Vanguard Small-Cap Value ETF has $30.60 billion. IWN has an expense ratio of 0.24% and VBR charges 0.07%.

Bottom-Line

Retail and institutional investors increasingly turn to passively managed ETFs because they offer low costs, transparency, flexibility, and tax efficiency; these kind of funds are also excellent vehicles for long term investors.

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.