The iShares Morningstar Small-Cap Value ETF (ISCV) was launched on 06/28/2004, and is a passively managed exchange traded fund designed to offer broad exposure to the Small Cap Value segment of the US equity market.
The fund is sponsored by Blackrock. It has amassed assets over $438.65 million, 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
Small cap companies have market capitalization below $2 billion. They usually have higher potential than large and mid cap companies with stocks but higher risk.
Carrying lower than average price-to-earnings and price-to-book ratios, value stocks also have lower than average sales and earnings growth rates. When you look at long-term performance, value stocks have outperformed growth stocks in nearly all markets. But in strong bull markets, growth stocks are more likely to be winners.
Costs
Expense ratios are an important factor in the return of an ETF and in the long term, cheaper funds can significantly outperform their more expensive counterparts, other things remaining the same.
Annual operating expenses for this ETF are 0.06%, making it the least expensive products in the space.
It has a 12-month trailing dividend yield of 1.69%.
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 26.80% of the portfolio. Consumer Discretionary and Industrials round out the top three.
Looking at individual holdings, Tapestry Inc (TPR) accounts for about 0.70% of total assets, followed by Rivian Automotive Inc Class A (RIVN) and Talen Energy Corp (TLN).
The top 10 holdings account for about 5.07% of total assets under management.
Performance and Risk
ISCV seeks to match the performance of the MORNINGSTAR US SML CP BRD VLUE EXTD INDX before fees and expenses. The Morningstar US Small Cap Broad Value Extended Index comprises of small-capitalization U.S. equities that exhibit value characteristics.
The ETF has lost about -5.32% so far this year and was up about 5.27% in the last one year (as of 06/16/2025). In the past 52-week period, it has traded between $51.37 and $69.50.
The ETF has a beta of 1.09 and standard deviation of 21.53% for the trailing three-year period. With about 1114 holdings, it effectively diversifies company-specific risk.
Alternatives
IShares Morningstar Small-Cap Value ETF holds a Zacks ETF Rank of 1 (Strong Buy), which is based on expected asset class return, expense ratio, and momentum, among other factors. Because of this, ISCV is an excellent 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 ETF (VBR) track a similar index. While iShares Russell 2000 Value ETF has $10.81 billion in assets, Vanguard Small-Cap Value ETF has $28.59 billion. IWN has an expense ratio of 0.24% and VBR charges 0.07%.
Bottom-Line
While an excellent vehicle for long term investors, passively managed ETFs are a popular choice among institutional and retail investors due to their low costs, transparency, flexibility, and tax efficiency.
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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iShares Morningstar Small-Cap Value ETF (ISCV): ETF Research Reports Talen Energy Corporation (TLN): Free Stock Analysis Report Vanguard Small-Cap Value ETF (VBR): ETF Research Reports iShares Russell 2000 Value ETF (IWN): ETF Research Reports Tapestry, Inc. (TPR): Free Stock Analysis Report Rivian Automotive, Inc. (RIVN): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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