Which Is the Better Small-Cap ETF, Vanguard's VB or the iShares ISCB?

2026-06-19 23:38:01 ET

Investors seeking to diversify away from the dominance of the largest mega-cap stocks often turn to small-cap funds to capture the potential of the next generation of industry leaders. Small-cap stocks often provide greater growth potential than their large-cap counterparts, though they typically involve more significant price swings.

Both Vanguard Small-Cap ETF (NYSEMKT:VB) and iShares Morningstar Small-Cap ETF (NYSEMKT:ISCB) target this segment of the market, offering low-cost access to hundreds of smaller U.S. companies that are frequently overlooked by the major indices.

The Vanguard Small-Cap ETF offers massive liquidity and a lower expense ratio, while the iShares Morningstar Small-Cap ETF provides broader diversification with over 1,500 holdings and a marginally higher trailing dividend yield.

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