Designed to provide broad exposure to the Small Cap Value segment of the US equity market, the Vanguard S&P Small-Cap 600 Value Index Fund ETF Shares (VIOV) is a passively managed exchange traded fund launched on September 9, 2010.
The fund is sponsored by Vanguard. It has amassed assets over $1.84 billion, 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
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.
Value stocks are known for their lower than average price-to-earnings and price-to-book ratios, but investors should also note their lower than average sales and earnings growth rates. Looking at their long-term performance, value stocks have outperformed growth stocks in almost all markets. They are however likely to underperform growth stocks in strong bull markets.
Costs
Cost is an important factor in selecting the right ETF, and cheaper funds can significantly outperform their more expensive counterparts if all other fundamentals are the same.
Annual operating expenses for this ETF are 0.1%, making it one of the least expensive products in the space.
It has a 12-month trailing dividend yield of 1.69%.
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 22% of the portfolio. Consumer Discretionary and Industrials round out the top three.
Looking at individual holdings, Eastman Chemical Co (EMN) accounts for about 1.12% of total assets, followed by Jackson Financial Inc (JXN) and Lkq Corp (LKQ).
The top 10 holdings account for about 7.45% of total assets under management.
Performance and Risk
VIOV seeks to match the performance of the S&P SmallCap 600 Value Index before fees and expenses. The S&P SmallCap 600 Value Index represents the value companies of the S&P SmallCap 600 Index.
The ETF has gained about 19.65% so far this year and was up about 32.05% in the last one year (as of 07/14/2026). In the past 52-week period, it has traded between $85.31 and $117.33.
The ETF has a beta of 0.99 and standard deviation of 20.7% for the trailing three-year period, making it a medium risk choice in the space. With about 464 holdings, it effectively diversifies company-specific risk.
Alternatives
Vanguard S&P Small-Cap 600 Value Index Fund ETF Shares 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, VIOV 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 Index Fund ETF Shares (VBR) track a similar index. While iShares Russell 2000 Value ETF has $14.24 billion in assets, Vanguard Small-Cap Value Index Fund ETF Shares has $36.70 billion. IWN has an expense ratio of 0.24% and VBR charges 0.05%.
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.
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Vanguard S&P Small-Cap 600 Value Index Fund ETF Shares (VIOV): ETF Research Reports
This article originally published on Zacks Investment Research (zacks.com).