Should Vanguard Small-Cap Value ETF (VBR) Be on Your Investing Radar?

If you're interested in broad exposure to the Small Cap Value segment of the US equity market, look no further than the Vanguard Small-Cap Value ETF (VBR), a passively managed exchange traded fund launched on January 26, 2004.The fund is sponsored by Vanguard. It has amassed assets over $31.67 billion, making it the largest ETF attempting to match the Small Cap Value segment of the US equity market.Why Small Cap ValueSmall 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. 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. CostsWhen considering an ETF's total return, expense ratios are an important factor, and cheaper funds can significantly outperform their more expensive counterparts in the long term if all other factors remain equal.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 1.96%.Sector Exposure and Top HoldingsIt is important to delve into an ETF's holdings before investing despite the many upsides to these kinds of funds like diversified exposure, which minimizes single stock risk. 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 21.8% of the portfolio. Industrials and Consumer Discretionary round out the top three.Looking at individual holdings, Nrg Energy Inc (NRG) accounts for about 0.9% of total assets, followed by Emcor Group Inc (EME) and Slcmt1142Performance and RiskVBR 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 about 7.14% so far this year and it's up approximately 6.29% in the last one year (as of 09/22/2025). In the past 52-week period, it has traded between $162.76 and $217.30.The ETF has a beta of 1.06 and standard deviation of 19.44% for the trailing three-year period, making it a medium risk choice in the space. With about 842 holdings, it effectively diversifies company-specific risk.AlternativesVanguard 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 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 $9.00 billion in assets, iShares Russell 2000 Value ETF has $12.07 billion. FNDA has an expense ratio of 0.25% and IWN charges 0.24%.Bottom-LineWhile 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.Boost Your Portfolio with Our Top ETF InsightsZacks' exclusive Fund Newsletter delivers actionable information, top news and analysis, as well as top-performing ETFs, straight to your inbox every week.Don’t miss out on this valuable resource. It’s free!Get it now >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Vanguard Small-Cap Value ETF (VBR): ETF Research ReportsThis article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks