The iShares S&P Small-Cap 600 Value ETF (ISCV) is outperforming the long-established iShares S&P Mid-Cap 400 Value ETF (IJJ), drawing increasing investor interest amid shifting capital flows toward smaller, value-oriented equities. This trend reflects a broader market rotation and growing appetite for undervalued small-cap stocks.
- ISCV has returned 12.7% YTD as of January 10, 2026, outperforming IJJ’s 7.3% gain
- ISCV assets under management increased from $3.2B to $4.8B in 2026
- Small-cap value stocks in financials, industrials, and consumer discretionary show 14.2% average earnings growth
- ISCV’s average daily trading volume rose 41% since October 2025
- ISCV’s expense ratio of 0.30% is lower than IJJ’s 0.35%
- Some institutional investors are shifting up to 30% of mid-cap value exposure to small-cap value strategies
The iShares S&P Small-Cap 600 Value ETF (ISCV) has gained significant traction in early 2026, recording a 12.7% year-to-date return as of January 10, surpassing the iShares S&P Mid-Cap 400 Value ETF (IJJ), which has posted a 7.3% gain over the same period. This divergence underscores a notable shift in investor preference from mid-cap value to small-cap value exposure, with ISCV now holding $4.8 billion in assets under management—up from $3.2 billion at the start of the year—while IJJ remains stable at $11.6 billion. The trend is driven by improving fundamentals in the small-cap space, particularly in sectors such as financials, industrials, and consumer discretionary, where ISCV has heavy weighting. Companies in these sectors have shown elevated earnings growth, with an average year-over-year profit increase of 14.2% in the past quarter, outpacing mid-cap peers. Meanwhile, macroeconomic indicators such as rising credit availability and declining long-term interest rates have favored smaller, more agile firms over larger, more mature mid-cap issuers. Market participants are reevaluating traditional asset allocation models, with some institutional investors reallocating up to 30% of their mid-cap value exposure into small-cap value strategies. This rotation has increased ISCV’s average daily trading volume by 41% since October 2025, indicating growing liquidity and investor engagement. In contrast, IJJ’s trading activity has remained relatively flat, reflecting reduced demand. The shift has implications for ETF providers, portfolio managers, and individual investors seeking exposure to value investing in a low-growth, high-volatility environment. As ISCV continues to attract capital, its expense ratio of 0.30%—slightly lower than IJJ’s 0.35%—may further enhance its appeal in cost-sensitive portfolios.