Small-Cap Value Showdown: Comparing SLYV and ISCV ETFs

The choice between the State Street SPDR S&P 600 Small Cap Value ETF (SLYV) and the iShares Morningstar Small-Cap Value ETF (ISCV) comes down to a trade-off between strict profitability filters and broad, deep-value diversification. Both funds target the U.S. small-cap value segment and share similar risk profiles, including a beta of 1.2 and a 2% dividend yield. However, their internal structures differ significantly. ISCV is the more cost-effective option, charging an expense ratio of 0.06%, while SLYV charges 0.15%. Diversification is another key differentiator. ISCV holds more than 1,000 stocks, with top positions including Moderna, CF Industries, and Alcoa, each making up less than 1% of the fund. SLYV is more concentrated, holding approximately 460 companies such as Eastman Chemical, Match Group, and LKQ. The underlying index methodologies also diverge. SLYV tracks the S&P SmallCap 600 Value Index, which utilizes a profitability screen to filter holdings. In contrast, ISCV tracks the Morningstar U.S. Small Value Extended Index, which focuses on the deepest discounts without a profitability requirement, leaning further into 'deep value' territory. Historically, the two funds have delivered comparable results. SLYV has posted annualized total returns of 9.3%, while ISCV has returned 8.7%. Both have recently outperformed the broader market over a one-year trailing period, though they have slightly lagged the S&P 500 over the long term.