What is the fundamental difference between AVUV and VBR?

AVUV and VBR are both U.S. small-cap value ETFs, yet they approach the sector differently. AVUV focuses on quantitative factors like profitability and value, managed by Avantis. VBR tracks a broad index to capture the general small-cap value market, managed by Vanguard. Both aim for long-term capital appreciation in smaller companies with lower valuations, but their selection methods and operational philosophies differ significantly.

How do expense ratios differ between these two funds?

The expense ratio represents the annual fee charged by fund providers. AVUV has an expense ratio of 0.25%, reflecting its active, factor-based management. In contrast, VBR charges a much lower 0.05% due to its passive index-tracking strategy. This 0.20% difference means that, all else being equal, VBR retains slightly more of its gross returns for investors, although higher fees do not guarantee lower net performance.

Why is the inception date important for these ETFs?

Inception dates reveal operational history. VBR launched in 2004, offering over two decades of track record data. AVUV launched in September 2019, making it relatively newer. Longer histories allow investors to observe how a fund performs across various market cycles, whereas newer funds like AVUV offer less historical context but may apply refined investment methodologies derived from recent academic research.

Do the top holdings of AVUV and VBR overlap?

No. The top ten holdings for AVUV and VBR show no overlap. AVUV's largest positions include MATX and GATX, while VBR's top holdings feature MRNA and JBL. This divergence indicates that despite both targeting the small-cap value sector, their underlying portfolios are constructed differently, likely leading to distinct risk profiles and performance trajectories depending on which specific companies outperform.

How do the dividend yields compare?

VBR currently offers a higher dividend yield of 1.81% compared to AVUV's 1.24%. This suggests VBR's holdings may pay out more regular income, which can be beneficial for income-focused investors. However, yield is just one component of total return. AVUV's lower yield might indicate its constituents are reinvesting more into growth or simply reflects the specific characteristics of the companies selected by its factor model.

What does concentration in top holdings imply?

Both funds maintain low concentration in their top positions. AVUV's largest holding is 1.10%, and VBR's largest is 1.07%. This high diversification across many small companies reduces the risk of significant performance damage if a single stock fails. Small-cap investing inherently involves higher volatility, but such broad holdings help mitigate idiosyncratic risk associated with individual company issues.

How does fund size impact liquidity?

Both AVUV and VBR have substantial net assets, at $30.9 billion and $37.0 billion respectively. Large asset bases generally support better liquidity, meaning investors can likely buy or sell shares with tighter spreads and less price impact. While AVUV is newer, its rapid asset accumulation suggests significant investor adoption, potentially enhancing tradeability compared to smaller, less liquid niche funds.

Is there transparency on the indices tracked?

No specific index data is available for either AVUV or VBR in the provided comparison. AVUV follows a proprietary quantitative methodology rather than a traditional benchmark index. VBR typically tracks a broad small-cap value index, but without specific index details provided, investors should review the official fund prospectuses to fully understand the precise criteria and rebalancing rules governing each portfolio.

What costs should investors consider beyond expense ratios?

While expense ratios differ (0.25% for AVUV vs 0.05% for VBR), investors must also consider trading costs. Both funds have large asset bases, which usually supports tight bid-ask spreads. However, frequent trading of smaller-cap ETFs can incur commission fees or slippage depending on the broker. These transaction costs can erode returns, particularly in a portfolio with frequent rebalancing or small trade sizes.

How do tax implications differ for dividends?

VBR's higher dividend yield of 1.81% compared to AVUV's 1.24% may result in a greater tax burden for investors in taxable accounts who receive these dividends. Qualified dividends are taxed at lower rates than ordinary income, but the total amount distributed is relevant. Investors should consult tax professionals to understand how the specific distribution characteristics of each fund affect their individual tax situation.

How do the holdings' weights reflect risk?

Neither fund holds a dominant position, with top weights barely exceeding 1%. This structure minimises single-stock risk. However, being in the Small Value category, both funds are exposed to higher volatility than large-cap stocks. The lack of overlap in top ten holdings suggests they may react differently to sector-specific events. Diversification within the fund is high, but overall exposure remains concentrated in smaller companies.

Can these funds be used for income or growth?

Both funds primarily target long-term capital growth associated with the small-cap value factor. While VBR offers a higher yield (1.81%) that contributes to income, AVUV (1.24%) also provides a modest income stream. Neither is designed as a pure income fund like bond ETFs. They serve as growth-oriented components of a diversified equity portfolio, where income is a secondary by-product of the holdings.

AVUV vs VBR

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

Compare AVUV (Avantis U.S. Small Cap Value ETF) and VBR (Vanguard Small-Cap Value ETF) to assess fees, holdings and dividends. Note that expense ratios are 0.25% and 0.05% respectively, while index tracking data is not available for either fund. Educational content, not financial advice.

Fund Snapshot

Key Fund Metrics

AVUV

Metric

VBR

0.25%

Expense Ratio

0.05%

1.24%

Dividend Yield

1.81%

$30.93B

Net Assets

$36.98B

798

Holdings

847

Sep 24, 2019

Inception Date

Jan 26, 2004

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Index Tracked

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Small Value

Fund Category

Small Value

VBR costs about $20.00 less per year for every $10,000 invested.

Shared Top Holdings

These funds do not share any of their top holdings.

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Investment Analysis

AVUV

Pros

Avantis U.S. Small Cap Value ETF has accumulated substantial net assets of $30.9 billion since its inception.
The fund's top holdings are highly diversified with no single position exceeding a 1.10% weight.
A dividend yield of 1.24% provides a modest income stream characteristic of the small-cap value category.

Considerations

The expense ratio of 0.25% is considerably higher than passive alternatives available in the same category.
The fund is relatively new with an inception date of 24 September 2019 compared to established peers.
The index methodology is not available which limits transparency on how holdings are selected.

VBR

Pros

The extremely low expense ratio of 0.05% helps maximise net returns for investors over the long term.
The fund benefits from a long operating history with an inception date of 26 January 2004.
Net assets of $37.0 billion support high liquidity and reduce the risk of fund closure.

Considerations

A higher dividend yield of 1.81% may create tax drag for investors in taxable accounts.
The portfolio includes Moderna as the top holding which introduces idiosyncratic single-stock risk.
The specific index tracked is not available in the data provided reducing methodological clarity.

About AVUV and VBR

AVUV (AVUV)

The Avantis U.S. Small Cap Value ETF (AVUV) is an exchange-traded fund designed to provide investors with exposure to small-cap value stocks within the United States. Managed by American Century ETF Trust, this fund employs a systematic approach to select holdings that exhibit characteristics of the value factor, such as high book-to-price ratios and low earnings yields, alongside small size. With an inception date in September 2019, AVUV has rapidly grown to hold net assets of approximately USD 30.93 billion. It maintains a competitive expense ratio of 0.25%, aiming to offer cost-effective access to this specific market segment. The fund currently holds 798 distinct securities and has a dividend yield of 1.24%. Investors considering AVUV should be aware that small-cap value stocks can experience greater volatility compared to large-cap growth equities. While the strategy seeks to capture potential long-term returns associated with these factors, past performance is not a reliable indicator of future results, and the value of investments can go down as well as up.

VBR (VBR)

The Vanguard Small-Cap Value ETF (VBR) offers investors exposure to smaller companies that are often valued by the market at lower multiples relative to their earnings or book value. With net assets of approximately USD 36.98 billion and a low expense ratio of 0.05%, it aims to provide cost-efficient access to the US small-cap value sector. The fund holds over 840 individual stocks, diversifying risk across a broad range of companies. Historically, small-cap value strategies have been associated with higher potential returns, though they can also experience greater volatility compared to large-cap stocks. VBR pays a dividend yield of around 1.81%, offering a modest income stream. This ETF is suitable for those looking to complement a core portfolio with a factor tilt towards smaller, potentially undervalued businesses, keeping in mind that values can rise and fall.

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AVUV vs VBR

Fund Snapshot