PruFid Financial Advisors LLC

US Small-Cap Value Funds

There is good reason to believe that small stocks and value stocks will, in the long run and on average, tend to have higher risk-adjusted returns than large and growth stocks, respectively. In order to seek exposure to both the small and value risk factors at the same time, it seems natural to invest in a small-cap value fund.

There are several similar-seeming investment options available. Which is best?

The funds are listed in rough order of our overall preference.

Preferences are listed separately for use in retirement accounts and for taxable accounts.

For a listing of our preferences in other asset classes, see here.

Retirement Accounts (i.e., tax-deferred or tax-exempt accounts)

• Invesco S&P SmallCap Value with Momentum ETF (XSVM). E/R: 0.36%. This fund attempts to track the S&P SmallCap 600 High Momentum Value Index. This index starts with the S&P SmallCap 600. It takes the 40% most valuey stocks thereof. Then it ranks those by momentum score. It takes the 50% with the highest momentum score. Then it weights the remaining stocks by value-ness. This gives a very valuey portfolio which also has some momentum exposure.
• Bridgeway Omni Small-Cap Value Fund (BOSVX). E/R: 0.47%. This fund is both extremely small (as measured by weighted average market capitalization) and extremely valuey (as measured by weighted average book to market value).
• EA Bridgeway Omni Small-Cap Value ETF (BSVO). E/R: 0.47%. This ETF is both extremely small (as measured by weighted average market capitalization) and extremely valuey (as measured by weighted average book to market value).
• Invesco S&P SmallCap 600 Pure Value ETF (RZV). E/R: 0.35%. This ETF tracks the S&P SmallCap 600 Pure Value Index. It is both extremely small (as measured by weighted average market capitalization) and extremely valuey (as measured by weighted average book to market value). Unlike virtually all other passively managed funds, this fund isn't weighted by market cap, but rather by "value-ness."
• Avantis U.S. Small Cap Value Fund (AVUVX). E/R: 0.25%. This ETF buys small-cap US stocks that are both very valuey and profitable.
• DFA US Small Cap Value Portfolio (DFSVX). E/R: 0.30%. This fund is both small (as measured by weighted average market capitalization) and valuey (as measured by weighted average book to market value).
• Avantis U.S. Small Cap Value ETF (AVUV). E/R: 0.25%. This ETF buys small-cap US stocks that are both very valuey and profitable.
• DFA US Small Cap Value ETF (DFSV). E/R: 0.31%. This fund is both relatively small (as measured by weighted average market capitalization) and valuey (as measured by weighted average book to market value).
• DFA US Targeted Value Portfolio (DFFVX). E/R: 0.29%. This fund is similar to DFSVX above, only with somewhat less of a small-cap orientation.
• DFA U.S. Targeted Value ETF (DFAT). E/R: 0.34%. This fund is similar to DFSV above, only with somewhat less of a small-cap orientation.
• Vanguard Small Cap Value Index Fund Admiral Shares (VSIAX). E/R: 0.07%. This fund tracks the CRSP US Small Cap Value Index.
• Vanguard Small Cap Value ETF (VBR). E/R: 0.07%. This ETF is a share class of the Vanguard Small Cap Value Index Fund (VSIAX).
• Vericimetry US Small Cap Value Fund (VYSVX). E/R: 0.61%. This fund is both small (as measured by weighted average market capitalization) and valuey (as measured by weighted average book to market value).
• Vanguard S&P Small Cap 600 Value ETF (VIOV). E/R: 0.10%. This ETF is a share class of the Vanguard S&P Small Cap 600 Value Index Fund Institutional Shares (VSMVX).
• Vanguard Russell 2000 Value ETF (VTWV). E/R: 0.10%. This ETF is a share class of the Vanguard Russell 2000 Value Index Fund Institutional Shares (VRTVX).
• iShares S&P Small Cap 600 Value Fund (IJS). E/R: 0.18%. This ETF tracks the S&P SmallCap 600 Value index.
• iShares US Small Cap Value Factor ETF (SVAL). E/R: 0.20%. This ETF tracks the Russell 2000 Focused Value Select Index.
• iShares Russell 2000 Value Fund (IWN). E/R: 0.24%. This ETF tracks the Russell 2000 Value index.
• SPDR Dow Jones Small Cap Value ETF (SLYV). E/R: 0.15%. This ETF tracks the S&P Small Cap 600 Value Index.
• iShares Morningstar Small Value ETF (ISCV). E/R: 0.06%. This ETF tracks all stocks which Morningstar considers to be "Small Value."

Taxable Accounts

• Invesco S&P SmallCap Value with Momentum ETF (XSVM). E/R: 0.36%. This fund attempts to track the S&P SmallCap 600 High Momentum Value Index. This index starts with the S&P SmallCap 600. It takes the 40% most valuey stocks thereof. Then it ranks those by momentum score. It takes the 50% with the highest momentum score. Then it weights the remaining stocks by value-ness. This gives a very valuey portfolio which also has some momentum exposure.
• EA Bridgeway Omni Small-Cap Value ETF (BSVO). E/R: 0.47%. This ETF is both extremely small (as measured by weighted average market capitalization) and extremely valuey (as measured by weighted average book to market value).
• Invesco S&P SmallCap 600 Pure Value ETF (RZV). E/R: 0.35%. This ETF tracks the S&P SmallCap 600 Pure Value Index. It is both extremely small (as measured by weighted average market capitalization) and extremely valuey (as measured by weighted average book to market value). Unlike virtually all other passively managed funds, this fund isn't weighted by market cap, but rather by "value-ness."
• Avantis U.S. Small Cap Value ETF (AVUV). E/R: 0.25%. This ETF buys small-cap US stocks that are both very valuey and profitable.
• DFA US Small Cap Value ETF (DFSV). E/R: 0.31%. This fund is both relatively small (as measured by weighted average market capitalization) and valuey (as measured by weighted average book to market value).
• DFA U.S. Targeted Value ETF (DFAT). E/R: 0.34%. This fund is similar to DFSV above, only with somewhat less of a small-cap orientation.
• Vanguard Small Cap Value Index Fund Admiral Shares (VSIAX). E/R: 0.07%. This fund tracks the CRSP US Small Cap Value Index.
• Vanguard Small Cap Value ETF (VBR). E/R: 0.07%. This ETF is a share class of the Vanguard Small Cap Value Index Fund (VSIAX).
• Vanguard S&P Small Cap 600 Value ETF (VIOV). E/R: 0.10%. This ETF is a share class of the Vanguard S&P Small Cap 600 Value Index Fund Institutional Shares (VSMVX).
• Vanguard Russell 2000 Value ETF (VTWV). E/R: 0.10%. This ETF is a share class of the Vanguard Russell 2000 Value Index Fund Institutional Shares (VRTVX).
• iShares S&P Small Cap 600 Value Fund (IJS). E/R: 0.18%. This ETF tracks the S&P Small Cap 600 Value Index.
• iShares US Small Cap Value Factor ETF (SVAL). E/R: 0.20%. This ETF tracks the Russell 2000 Focused Value Select Index.
• iShares Russell 2000 Value Fund (IWN). E/R: 0.24%. This ETF tracks the Russell 2000 Value index.
• SPDR Dow Jones Small Cap Value ETF (SLYV). E/R: 0.15%. This ETF tracks the S&P Small Cap 600 Value Index.
• iShares Morningstar Small Value ETF (ISCV). E/R: 0.06%. This ETF tracks all stocks which Morningstar considers to be "Small Value."

This web page contains the current opinions of Eric E. Haas at the time it is written—and such opinions are subject to change without notice. This web page is intended to serve two purposes:

• To educate the public; and
• To provide disclosure of Mr. Haas' opinions to prospective clients. We believe that prospective clients are well-served by being made aware of what they are buying—and what they are buying is advice that is based on these opinions.

We believe the information provided here to be useful and accurate at the time it is written. Information contained herein has been obtained from sources believed to be reliable, but is not guaranteed.

No investor should invest solely on the basis of information listed here. Before investing, it is important to consult each prospective investment's prospectus and consider both its risk/return characteristics and its effect on your overall portfolio.

This information is not intended to be a substitute for specific individualized tax, legal, or investment planning advice. Where specific advice is necessary or appropriate, PruFid recommends consultation with a qualified tax adviser, CPA, financial planner, or investment adviser. If you would like to discuss the rationale or support for any particular idea expressed on this web page, feel free to contact us.