What exactly does 'international small cap' mean for AVDV and VSS?

International small cap refers to companies based outside the United States with relatively low market capitalisation. Both AVDV and VSS target this segment, offering exposure to smaller firms across various developed and emerging markets. Unlike large-cap funds, small caps can be more volatile but may also offer higher growth potential. Understanding this asset class is essential when comparing AVDV and VSS, as both funds aim to capture this specific market niche, though they differ in their approach to value versus blended styles.

How do expense ratios work and why are they different for these funds?

An expense ratio is the annual fee charged by a fund to manage investor assets, deducted directly from the fund's holdings. VSS has a low expense ratio of 0.06%, while AVDV charges 0.36%. The difference reflects the operational costs associated with each strategy; AVDV employs a systematic quantitative approach focused on valuation, which may involve higher management costs than VSS's broader index-tracking approach. These fees directly impact net returns over time.

What is dividend yield and how does it affect these ETFs?

Dividend yield measures the annual dividends paid out relative to the share price. AVDV has a yield of 3.07%, whereas VSS offers 2.84%. A higher yield can enhance total return, especially in slower-growth periods, but it does not guarantee higher capital appreciation. When comparing AVDV and VSS, investors should consider that yields fluctuate based on company performance and market conditions, and they are just one component of the overall return potential.

How does the fee difference between AVDV and VSS impact long-term returns?

The 0.30 percentage point difference in expense ratios (0.36% for AVDV vs 0.06% for VSS) can compound over time. While this might seem small, lower costs generally leave more money invested. However, higher fees are often justified if the active or semi-active strategy, like AVDV's valuation focus, outperforms the market. Investors must weigh whether they expect the potential upside from AVDV's specific factor tilts to exceed the consistent cost drag compared to the ultra-low-cost VSS.

Do AVDV and VSS hold the same stocks?

There is some overlap, but they are not identical. Both funds list SSR Mining Ltd (SSRM) in their top holdings, though the weight differs significantly: 0.47% in AVDV and 0.20% in VSS. Other top holdings for AVDV include CDE (0.60%) and ZIM (0.43%), which are not listed in VSS's top holding data provided. This indicates that while both target international small caps, their specific portfolio compositions and valuation criteria lead to different stock selections.

Which fund is better for generating income, AVDV or VSS?

Based on current data, AVDV offers a higher dividend yield of 3.07% compared to VSS's 2.84%. If generating income is the primary goal, AVDV's yield profile is more favourable. However, yields can change as fund prices fluctuate or as underlying companies alter dividend policies. Investors should look beyond just the headline yield to understand the sustainability of distributions and the fund's overall total return performance when evaluating income potential between these two ETFs.

How do the fund objectives differ in terms of factor investing?

AVDV is explicitly a valuation-focused fund, targeting small-cap stocks that appear cheap relative to fundamentals. In contrast, VSS is a blend fund, offering broader exposure to the international small-cap market without a specific tilt towards value or growth. This means AVDV is designed for investors seeking a factor-based approach to potential excess returns, while VSS provides a more neutral, low-cost representation of the entire international small-cap sector.

Is there a track record difference between AVDV and VSS?

Yes, there is a significant difference in operating history. VSS was established in April 2009, providing over 15 years of performance data. AVDV launched in September 2019, resulting in a much shorter track record. This limited history for AVDV makes it harder to assess how the strategy performs across full market cycles, whereas VSS offers a longer window for evaluating consistency and stability relative to its benchmark.

How does fund size affect liquidity for AVDV and VSS?

AVDV has net assets of $20.5 billion, while VSS holds $11.8 billion. Both figures indicate substantial scale, which generally supports reasonable liquidity and allows investors to buy or sell shares without significant price impact. While AVDV is larger in terms of assets, both funds are well-capitalised for institutional and retail use. Size alone does not dictate performance, but it can influence trading efficiency and fund stability.

What role does the 'value factor' play in AVDV's market positioning?

AVDV targets the value factor, focusing on companies with lower prices relative to earnings or book value. Historically, this factor can outperform during economic recoveries or rising interest rate environments. Conversely, VSS does not target this factor, capturing the broader market. Investors choosing AVDV are making a strategic bet that small-cap value stocks will deliver superior returns compared to the general international small-cap universe tracked by VSS.

Which fund aligns better with a low-cost indexing strategy?

VSS aligns more closely with a low-cost indexing strategy due to its expense ratio of 0.06%, which is exceptionally low for an international small-cap fund. AVDV, at 0.36%, is a semi-active or quantitative strategy fund. If minimizing fees is the paramount practical concern, VSS is the more cost-efficient option. However, practical fit also depends on whether the investor values the potential alpha from AVDV's valuation-based approach more than the cost savings.

What should beginners know about comparing AVDV and VSS?

Beginners should note that comparing these funds involves weighing cost against potential strategy benefits. VSS offers broad, cheap exposure with a long history, while AVDV offers a targeted valuation strategy with higher fees and a shorter track record. Neither is inherently 'better'; it depends on your investment thesis. Always consider that past performance does not guarantee future results and that educational content is not financial advice.

AVDV vs VSS

Two funds, one decision: we compare cost, performance and what each ETF actually holds in September 2026.

Compare AVDV and VSS to evaluate fees, holdings, dividends and market tracking. AVDV charges 0.36% with a 3.07% yield; VSS costs 0.06% with 2.84%. Both target international small caps. Educational content, not financial advice.

Fund Snapshot

Key Fund Metrics

AVDV

Metric

VSS

0.36%

Expense Ratio

0.06%

3.07%

Dividend Yield

2.84%

$20.46B

Net Assets

$11.79B

1,745

Holdings

4,910

Sep 24, 2019

Inception Date

Apr 2, 2009

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Index Tracked

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Foreign Small/Mid Value

Fund Category

Foreign Small/Mid Blend

VSS costs about $30.00 less per year for every $10,000 invested.

Shared Top Holdings

Holding	AVDV	VSS
SSRMSSR Mining Inc.	0.47%	0.20%

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Investment Analysis

AVDV

Pros

Lower expense ratio of 0.36% compared to many active funds.
Substantial net assets of $20.5 billion provide scale and liquidity.
Solid dividend yield of 3.07% enhances total return potential.

Considerations

Lack of published index tracked details obscures benchmark alignment.
Absence of sector weights prevents immediate diversification assessment.
Relatively recent inception date of 2019 limits long-term track record.

VSS

Pros

Very low expense ratio of 0.06% is cost-efficient for investors.
Longer operating history since inception in 2009 aids stability assessment.
Moderate net assets of $11.8 billion support reasonable liquidity levels.

Considerations

Slightly lower dividend yield of 2.84% than some peers.
Concentrated top holding SSRM at 0.20% may indicate single-stock risk.
Unpublished sector weights hinder transparent portfolio composition evaluation.

About AVDV and VSS

AVDV (AVDV)

The Avantis International Small Cap Valuation ETF is an exchange-traded fund designed for investors looking to access small-cap companies located outside the United States. Launched in September 2019, this fund falls within the Foreign Small/Mid Value category and currently holds a substantial net asset value of approximately USD 20.46 billion. It maintains a diversified portfolio of 1,745 holdings, offering broad exposure to the international small-cap value sector. Investors should be aware that the fund operates with an expense ratio of 0.36% and currently provides a dividend yield of 3.07%. As with any investment focused on smaller companies and international markets, value can fluctuate based on market conditions and economic factors. This ETF is intended for those seeking diversification beyond domestic markets, though returns are not guaranteed and capital is at risk.

VSS (VSS)

The Vanguard FTSE All-World ex-US Small Cap ETF (VSS) offers investors access to a diversified portfolio of small-cap stocks outside the United States. This fund aims to track the performance of developed and emerging market small-cap companies, excluding US firms. With a low expense ratio of 0.06%, it provides a cost-effective way to gain exposure to global small-cap markets. As of its inception in April 2009, the fund has accumulated net assets of approximately USD 11.79 billion and holds over 4,900 securities. Investors should note that while small-cap stocks can offer significant growth potential, they also come with higher volatility. The fund's dividend yield is currently 2.84%, reflecting income opportunities from its holdings. It's important to remember that values can fluctuate, and past performance is not indicative of future results.

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AVDV vs VSS

Fund Snapshot