Are you interested in investing in small-cap Exchange-Traded Funds (ETFs)? If you are, then our comparative analysis of VIOV vs. VBR will be an excellent starting point. This review will discuss the similarities and differences between the two and which one is better for your situation.
Both VIOV and VBR are qualified as ETFs, and they are one of the most popular small-cap ETFs in circulation today.
Small-cap ETFs are highly sought after by small-time investors who do not wish to invest in large blend equities or cannot afford to do so.
In this article, we’ll review VIOV vs. VBR based on their unique features, composition, and performance differences. At the end of the review, you will be the one to decide which of them will suit you best.
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VIOV: Vanguard S&P Small-Cap 600 Value ETF
VIOV or Vanguard S&P Small-Cap 600 Value ETF is a creation of Vanguard. The market cap ETF is a collection of small-cap stocks in the US stock market. The index VIOV selects stocks from a collection of S&P Small-Cap 600.
VIOV tracks the S&P Small-Cap 600 Value Index, and the managers decide what percentage they want to invest their funds into. The approach is to capture smaller stocks based on specific characteristics. Some of them are their sales-to-price, earnings, book value, and other characteristics.
Also, note that VIOV adopts a passive management style, not an active one.
Since its creation, it has provided investors with limited funds with the opportunity to buy emerging stocks for long-term value. Let’s review VIOV’s top ten holdings:
| Asset | Percentage |
| GameStop Corp. Class A | 1.11% |
| Macy’s Inc. | 1.04% |
| PDC Energy Inc. | 0.80% |
| Resideo Technologies Inc. | 0.76% |
| Signet Jewelers Ltd | 0.75% |
| Pacific Premier Bancorp Inc. | 0.71% |
| BankUnited Inc. | 0.70% |
| First Hawaiian Inc. | 0.65% |
| Assured Guaranty Ltd | 0.63% |
| Bed Bath & Beyond Inc. | 0.63% |
VBR: Vanguard Small-Cap Value ETF
VBR or Vanguard Small-Cap Value ETF is arguably the most popular small-cap ETF today. It was one of the first of its kind to be created, and it tracks the US small-cap value index. The index measures the returns of small-cap value stocks in the market.
VBR employs an investment approach designed to value and invest in small US companies. With the information obtained from the index, managers attempt to replicate the target index by investing a substantial volume of funds into these assets.
VBR is designed to track the performance of all small stocks in the index by measuring their returns in relation to their current value. VBR also tracks the US small-cap market using CRSP indexing. Here are the top ten companies VBR invests in:
| Asset | Percentage |
| Diamondback Energy Inc. | 0.55% |
| IDEX Corp. | 0.54% |
| VICI Properties Inc. Ordinary Shares | 0.54% |
| Nuance Communications Inc. | 0.50% |
| Molina Healthcare Inc. | 0.48% |
| Signature Bank | 0.46% |
| Howmet Aerospace Inc. | 0.44% |
| Novavax Inc. | 0.44% |
| Apollo Global Management Inc. Class A | 0.42% |
| Brown & Brown Inc. | 0.41% |
VIOV Vs. VBR: Key Differences
VIOV and VBR are both small-cap ETFs. While VBR was one of the first small-cap ETFs ever made, VIOV was one of the last. They track the S&P Small-Cap 600 Index, and they are both ETFs. However, they have certain differences you should be aware of.
VBR was introduced in 2004, while VIOV came in 2010. VIOV outperformed many other small-cap ETFs that came before it, and it has been doing quite well over the last ten years.
However, in terms of pricing, VBR is much cheaper than all the funds that track the CRSP US Index. Also, VBR is much larger than VIOV, with an average market cap of $7.2 billion, which is more than twice VIOV. It is expected since it started ahead of VIOV.
It is also noteworthy to point out that it has its investments spread across more industries than VIOV, so it has enjoyed a strong performance record, and it has also outperformed other Vanguard ETFs of the same size and feature.
So while not much separates both ETFs by the same issuers, VBR has a stronger baseline and track record.
VIOV Vs. VBR: Composition Differences
Let’s have a detailed comparison of VIOV Vs. VBR in the assets that they track and invest in. Check the table below for us to have a clear idea.
| Category | VIOV | VBR |
| Type | ETF | ETF |
| Segment | US Small Cap | US Small Cap |
| Issuer | Vanguard | Vanguard |
| Net Assets | $1.53 billion | .08 billion |
| Expense Ratio | 0.15% | 0.07% |
| Style | Passive | Passive |
| Dividend Yield | 1.21% | 1.60% |
| Index | S&P Small-Cap 600 | CRSP Small-Cap Index |
VIOV Vs. VBR: Performance Differences
Now, let’s look at their performance differences.
VIOV Performance & Returns
| Returns | Percentage |
| YTD Returns | 30.52% |
| 1-Month Return | -0.64% |
| 3-Months Return | 5.00% |
| 1-Year Return | 77.30% |
| 3-Year Return | 10.74% |
| 5-Year Return | 14.42% |
| 10-Year Return | 12.87% |
VBR Performance & Returns
| Returns | Percentage |
| YTD Returns | 23.05% |
| 1-Month Return | -1.02% |
| 3-Months Return | 5.25% |
| 1-Year Return | 65.61% |
| 3-Year Return | 10.82% |
| 5-Year Return | 12.79% |
| 10-Year Return | 11.84% |
VIOV Vs. VBR: Fees
Another way to compare both assets is to look at their fees. VIOV has a higher expense fee of 0.15%, while VBR is much lower at 0.07%. On paper, 0.15% may not seem like much of a difference compared to 0.07%, but it becomes quite substantial when the fees accumulate over many years.
If you must invest in these ETFs or any other security for that matter, paying close attention to the expense ratio fee and calculating how much it will cost you over a five, ten, or twenty-year period is important.
VIOV vs. VBR: Frequently Asked Questions
Here are some of the frequently asked questions that can help you to understand VIOV vs. VBR better.
Is VIOV a Good ETF?
Yes, it is. The ETF tracks stocks in the S&P 600 US Small-Cap Stock Market Index. When you consider the momentum shift, expense ratio, asset return, and other substantial factors, it is indeed a good small-cap ETF to invest in. It has done quite well over the last few years, and the future projections are positive.
Is VBR a Good Investment?
VBR is a good investment for many reasons. It pays investors dividends regularly. VBR pays an annual dividend with an average yield of 1.60%. This makes a perfect small-cap ETF to invest in. Also, note that it has a low expense ratio of 0.07%.
What Are VBR Fees?
VBR has a very low expense fee which is one of the lowest. Its expense fee is 0.07%.
VIOV Vs. VBR: Which Small-Cap ETF Is Better?
Now that we have read through the different details between VIOV and VBR, which one should you choose?
The answer depends on your current financial profile and investment plans. Both ETFs can provide you with good returns down the line. If this ties up with your investment strategy, then invest away.
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VIOV and VBR are both small-cap ETFs that are good for small-time investors who do not want to invest in large blend equities but still get good returns.
Remember that any well-thought-out and well-studied investment is a good and wise venture to reach financial freedom. And this starts with one investment always, regardless of the amount.
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Founder of Spark Nomad, Radical FIRE, Journalist
Expertise: Personal finance and travel content
Education: Bachelor of Economics at Radboud University, Master in Finance at Radboud University, Minor in Economics at Chapman University.
Over 200 articles, essays, and short stories published across the web.
Experience: Marjolein Dilven is a journalist and founder of Radical FIRE, a personal finance platform, and Spark Nomad, a travel platform. Marjolein has a finance and economics background with a master’s in Finance. She has quit her job to travel the world, documenting her travels on Spark Nomad to help people plan their travels. Marjolein Dilven has written for publications like MSN, Associated Press, CNBC, Town News syndicate, and more.
