Vanguard Small-Cap Index has some great features. Its well-diversified portfolio and rock-bottom expense ratio should provide a sustainable edge over its Morningstar Category peers. But small-cap stocks are less liquid than large caps, so forced trades can impart additional costs to index-tracking strategies. Although the fund takes prudent steps to mitigate these costs, its lowest-cost share classes warrant a Morningstar Analyst Rating downgrade to Silver from Gold.
Vanguard Small-Cap ETF VB
Premium
Morningstar’s Analysis
The Morningstar Analysis section contains a thorough evaluation of an investment’s merits and drawbacks and often discusses the most important or decisive factors leading to the fund’s overall rating.
The Morningstar Analysis section contains a thorough evaluation of an investment’s merits and drawbacks and often discusses the most important or decisive factors leading to the fund’s overall rating.
Will VB outperform in future?
Get our overall rating based on a fundamental assessment of the pillars below.
Process Pillar
The Process Pillar is our assessment of how sensible, clearly defined, and repeatable VB’s performance objective and investment process is for both security selection and portfolio construction.
People Pillar
The People Pillar is our evaluation of the VB management team’s experience and ability. We find that high-quality management teams deliver superior performance relative to their benchmarks and/or peers.
Parent Pillar
The Parent Pillar is our rating of VB’s parent organization’s priorities and whether they’re in line with investors’ interests.
A well-constructed small-cap fund with a sizable cost advantage.
