Launched on June 28, 2004, the iShares Morningstar Small-Cap Value ETF (ISCV) 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 Blackrock. It has amassed assets over $702.09 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
With more potential comes more risk, and small cap companies, with market capitalization below $2 billion, epitomizes this way of thinking.
Value stocks are known for their lower than average price-to-earnings and price-to-book ratios, but investors should also note their 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
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 0.06%, making it one of the least expensive products in the space.
It has a 12-month trailing dividend yield of 1.8%.
Sector Exposure and Top Holdings
ETFs offer a diversified exposure and thus minimize single stock risk but it is still important to delve into a fund's holdings before investing. Most ETFs are very transparent products and many disclose their holdings on a daily basis.
This ETF has heaviest allocation to the Financials sector -- about 24.6% of the portfolio. Consumer Discretionary and Industrials round out the top three.
Looking at individual holdings, Jones Lang Lasalle (JLL) accounts for about 0.54% of total assets, followed by Best Buy (BBY) and Aramark (ARMK).
The top 10 holdings account for about 4.87% 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 return is roughly 18.64% so far this year and is up about 21.56% in the last one year (as of 09/08/2026). In the past 52-week period, it has traded between $63.71 and $81.79.
The ETF has a beta of 0.99 and standard deviation of 18.91% for the trailing three-year period. With about 1054 holdings, it effectively diversifies company-specific risk.
Alternatives
iShares Morningstar Small-Cap Value ETF 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, ISCV 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 Morningstar Small-Cap Value ETF (VBR) track a similar index. While iShares Russell 2000 Value ETF has $14.58 billion in assets, Vanguard Morningstar Small-Cap Value ETF has $37.54 billion. IWN has an expense ratio of 0.24% and VBR charges 0.05%.
Bottom-Line
Retail and institutional investors increasingly turn to passively managed ETFs because they offer low costs, transparency, flexibility, and tax efficiency; these kind of funds 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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iShares Morningstar Small-Cap Value ETF (ISCV): ETF Research ReportsThis article originally published on Zacks Investment Research (zacks.com).
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