Launched on September 9, 2010, the Vanguard S&P Small-Cap 600 Value Index Fund ETF Shares (VIOV) is a passively managed exchange traded fund designed to provide a broad exposure to the Small Cap Value segment of the US equity market.
The fund is sponsored by Vanguard. It has amassed assets over $1.55 billion, making it one of the average sized ETFs attempting to match the Small Cap Value segment of the US equity market.
Why Small Cap Value
With more potential comes more risk, and small cap companies, with market capitalization below $2 billion, epitomizes this way of thinking.
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. Considering long-term performance, value stocks have outperformed growth stocks in almost all markets; however, they are more likely to underperform growth stocks in strong bull markets.
Costs
Investors should also pay attention to an ETF's expense ratio. Lower cost products will produce better results than those with a higher cost, assuming all other metrics remain the same.
Annual operating expenses for this ETF are 0.1%, making it one of the least expensive products in the space.
It has a 12-month trailing dividend yield of 1.62%.
Sector Exposure and Top Holdings
Even though ETFs offer diversified exposure which minimizes single stock risk, it is still important to look into a fund's holdings before investing. Luckily, most ETFs are very transparent products that disclose their holdings on a daily basis.
This ETF has heaviest allocation to the Financials sector -- about 21.9% of the portfolio. Consumer Discretionary and Industrials round out the top three.
Looking at individual holdings, Lkq Corp (LKQ) accounts for about 1.08% of total assets, followed by Lincoln National Corp (LNC) and Eastman Chemical Co (EMN).
The top 10 holdings account for about 5.74% of total assets under management.
Performance and Risk
VIOV seeks to match the performance of the S&P SmallCap 600 Value Index before fees and expenses. The S&P SmallCap 600 Value Index represents the value companies of the S&P SmallCap 600 Index.
The ETF has added about 4.47% so far this year and it's up approximately 19.73% in the last one year (as of 03/09/2026). In the past 52-week period, it has traded between $71.94 and $108.93.
The ETF has a beta of 1.03 and standard deviation of 21.55% for the trailing three-year period, making it a medium risk choice in the space. With about 465 holdings, it effectively diversifies company-specific risk.
Alternatives
Vanguard S&P Small-Cap 600 Value Index Fund ETF Shares 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, VIOV 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 iShares Russell 2000 Value ETF (IWN) and the Vanguard Small-Cap Value Index Fund ETF Shares (VBR) track a similar index. While iShares Russell 2000 Value ETF has $12.45 billion in assets, Vanguard Small-Cap Value Index Fund ETF Shares has $32.96 billion. IWN has an expense ratio of 0.24% and VBR charges 0.05%.
Bottom-Line
An increasingly popular option among retail and institutional investors, passively managed ETFs offer low costs, transparency, flexibility, and tax efficiency; they are also excellent vehicles for long term investors.
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.
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Vanguard S&P Small-Cap 600 Value Index Fund ETF Shares (VIOV): ETF Research ReportsThis article originally published on Zacks Investment Research (zacks.com).
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