What is small-cap value investing?

Small-cap value investing targets companies with relatively small market capitalisations that appear undervalued compared to their peers. These stocks may offer growth potential if the market recognises their true worth, but they often carry higher volatility and lower liquidity than large-cap stocks. Value strategies focus on fundamentals such as earnings stability, dividend consistency and balance-sheet strength rather than hype or momentum.

What is the difference between active and passive management?

Active management involves fund managers making discretionary decisions to select holdings, aiming to outperform a benchmark. Passive management seeks to replicate an index’s performance with minimal trading. AVUV is actively managed, allowing flexibility in holdings, while VIOV passively tracks the S&P Small-Cap 600 Value Index, following strict inclusion rules. Each approach involves trade-offs between potential outperformance and cost.

How do the expense ratios of AVUV and VIOV compare?

AVUV charges a 0.25% annual expense ratio, reflecting active management costs. VIOV charges a lower 0.10% ratio, typical of index-tracking ETFs. The 0.15 percentage point difference accumulates over time: on a £10,000 investment, annual fees would be £25 for AVUV versus £10 for VIOV, assuming constant assets.

What are top holdings and why do they matter?

Top holdings represent the largest positions within a fund. AVUV’s top 10 include MATX at 1.10% and GATX at 0.89%, while VIOV leads with PAYC at 1.07%. Overlaps like MATX and SM show shared exposure. Concentration in top holdings influences risk: active managers may hold larger positions in conviction picks, whereas index funds spread exposure according to index rules.

Which ETFs have similar top holdings?

AVUV and VIOV share MATX and SM among their top 10 holdings. AVUV holds MATX at 1.10% and SM at 0.84%, while VIOV holds MATX at 0.73% and SM at 0.91%. Despite these overlaps, their broader portfolios differ due to AVUV’s active management versus VIOV’s index-tracking approach.

How do dividend yields affect my return?

Dividend yields indicate income generation. AVUV’s 1.24% yield is modest, while VIOV’s 1.73% is higher. For example, £10,000 invested would generate £124 versus £173 annually before tax. However, yields fluctuate with dividend payments and share prices. Yield-focused investors should assess payout consistency and sustainability.

Why is track record important?

Longer track records provide data on performance consistency. VIOV launched in September 2010, offering 16 years of history. AVUV began in September 2019, with only seven years of data. Investors often view established funds as having proven methodologies, though past performance does not guarantee future results.

How do net assets affect liquidity?

Net assets indicate a fund’s size and trading activity. AVUV has $30.9 billion in assets, supporting tight bid-ask spreads and easier trading. VIOV’s $1.8 billion is smaller, potentially causing wider spreads during volatile markets. Liquidity affects transaction costs and execution efficiency.

How does index tracking constrain performance?

VIOV tracks the S&P Small-Cap 600 Value Index, requiring holdings to match index composition. This creates systematic rebalancing but limits tactical adjustments. AVUV’s active management allows flexibility to shift holdings based on fundamental analysis, though this may not always outperform the benchmark.

How are dividends distributed for ETFs?

ETFs distribute dividends received from underlying holdings, typically quarterly. AVUV and VIOV pay distributions based on company dividends, not fund performance. Yields represent recent payouts. Investors receive dividends as cash payments or automatically reinvested, depending on the account settings.

AVUV vs VIOV

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

Compare AVUV and VIOV. Both target small-cap value stocks. We examine fees, holdings, dividends and market tracking for these ETFs. Educational content, not financial advice.

Fund Snapshot

Key Fund Metrics

AVUV

Metric

VIOV

0.25%

Expense Ratio

0.10%

1.24%

Dividend Yield

1.73%

$30.93B

Net Assets

$1.80B

798

Holdings

466

Sep 24, 2019

Inception Date

Sep 7, 2010

–

Index Tracked

–

Small Value

Fund Category

Small Value

VIOV costs about $15.00 less per year for every $10,000 invested.

Shared Top Holdings

Holding	AVUV	VIOV
MATXMatson, Inc.	1.10%	0.73%
SMSM Energy Company	0.84%	0.91%

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Investment Analysis

AVUV

Pros

Net assets of $30.9 billion support robust trading liquidity and narrow spreads for investors.
Active management allows flexibility, potentially adapting holdings beyond rigid index constraints as markets evolve.
Top holdings like MATX and GATX reflect focused small-cap value exposure distinct from broader benchmarks.

Considerations

The 0.25% expense ratio is relatively high compared to passive small-cap value alternatives.
A 1.24% dividend yield is modest, offering limited income generation for yield-focused investors.
Inception in 2019 provides a shorter operational track record than longer-established competing funds.

VIOV

Pros

The 0.10% expense ratio provides a cost-efficient vehicle for accessing small-cap value exposure.
A 1.73% dividend yield offers comparatively stronger current income than higher-growth oriented strategies.
Inception in 2010 demonstrates a long-standing operational track record under the Vanguard issuer.

Considerations

Net assets of $1.8 billion are smaller, potentially impacting liquidity relative to larger funds.
Tracking the S&P Small-Cap 600 Value Index imposes rigid rebalancing and inclusion criteria.
Shared holdings like MATX and SM may reduce diversification benefits versus active value managers.

About AVUV and VIOV

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.

VIOV (VIOV)

The Vanguard S&P Small-Cap 600 Value ETF (VIOV) offers investors exposure to a diversified basket of small-capitalisation U.S. companies that exhibit value characteristics. By tracking a specific segment of the U.S. equity market, this fund aims to capture returns associated with smaller, potentially undervalued firms that may offer growth opportunities as they mature. With an expense ratio of just 0.10%, VIOV is designed for cost-conscious investors seeking broad market access. The fund holds approximately 466 positions, providing a wide range of industry exposure while maintaining a focus on value metrics. As with any investment in equities, the value of the fund's shares can fall as well as rise, and past performance is not a reliable indicator of future results. It serves as a tool for portfolio diversification within the small-cap space.

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AVUV vs VIOV

Fund Snapshot