The Vanguard Small-Cap Value Index Fund ETF Shares (VBR) was launched on January 26, 2004, and is a passively managed exchange traded fund designed to offer broad exposure to the Small Cap Value segment of the US equity market.
The fund is sponsored by Vanguard. It has amassed assets over $35.39 billion, making it the largest ETF 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. When you look at long-term performance, value stocks have outperformed growth stocks in nearly all markets. But in strong bull markets, growth stocks are more likely to be winners.
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 0.05%, making it the least expensive products in the space.
It has a 12-month trailing dividend yield of 1.76%.
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 Industrials sector -- about 18.6% of the portfolio. Financials and Information Technology round out the top three.
Looking at individual holdings, Nrg Energy Inc (NRG) accounts for about 0.75% of total assets, followed by Atmos Energy Corp (ATO) and Tapestry Inc (TPR).
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 added roughly 11.62% so far this year and is up about 25.49% in the last one year (as of 06/04/2026). In the past 52-week period, it has traded between $189.43 and $236.07.
The ETF has a beta of 0.96 and standard deviation of 17.63% for the trailing three-year period, making it a medium risk choice in the space. With about 844 holdings, it effectively diversifies company-specific risk.
Alternatives
Vanguard Small-Cap 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, VBR 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 Schwab Fundamental U.S. Small Company ETF (FNDA) and the iShares Russell 2000 Value ETF (IWN) track a similar index. While Schwab Fundamental U.S. Small Company ETF has $8.93 billion in assets, iShares Russell 2000 Value ETF has $13.91 billion. FNDA has an expense ratio of 0.25% and IWN charges 0.24%.
Bottom-Line
An increasingly popular option among retail and institutional investors, passively managed ETFs offer low costs, transparency, flexibility, and tax efficiency; they 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 Small-Cap Value Index Fund ETF Shares (VBR): ETF Research Reports
This article originally published on Zacks Investment Research (zacks.com).