FDM vs VB

FDMCFirst Trust Dow Jones Select MicroCap Index Fund

VBAVanguard Morningstar Small-Cap ETF

In short

FDM Micro-cap, but screened. FDM's index starts with the US total market and keeps only the tiny companies that clear size, liquidity and fundamental tests. Running since 2005, at 0.60% net of a waiver through April 30, 2027.

VB Vanguard's small-cap workhorse: roughly 1,400 smaller US companies for three basis points. The CRSP index behind it shifts stocks between size bands in two half steps instead of one jump, which holds turnover down. Trading since 2004.

Stated mandate

FDM The fund seeks to track, before fees and expenses, the price and yield of the Dow Jones Select Microcap Index.

VB The fund seeks to track the CRSP US Small Cap Index, which measures the investment performance of small U.S. companies. It uses an indexing approach and generally replicates the index by holding its securities in approximately their index weights.

Why people hold it

• FDM The index is a filter, not a dragnet: it pulls from the Dow Jones US Total Stock Market universe and keeps only micro caps meeting size, liquidity and fundamental eligibility criteria.spglobal.com
• Listed in September 2005, one of the longest-tenured micro-cap index ETFs around, with a methodology that has been doing the same job through multiple market cycles.ftportfolios.com
• Roughly 140 stocks, so this is a diversified basket of micro caps rather than a few concentrated bets. Normally at least 90% of assets sit in actual index constituents.ftportfolios.com
• Cash comes back on a quarterly schedule, which is not a given in a corner of the market full of companies that pay nothing.

• VB Three basis points a year, against a small-cap category median near 0.25%. Cost is the one edge in indexing you actually keep.
• About 1,400 stocks held at roughly their index weights, so no single small-cap story carries the fund.vanguard.com
• Its CRSP benchmark migrates a stock between size segments in two 50% packets instead of one move, a design built to cut turnover.crsp.com
• Running since 2004, actively traded, and one of the strongest implementations in its 20-fund small-cap peer group.

Worth knowing

• FDM Screening costs money: 0.60% net of a waiver through April 30, 2027 (0.65% gross), above the category median. Plain small-cap trackers like SCHA and VB charge 0.03%.
• Thinly traded next to the giant small-cap funds, so bid-ask spreads can widen and sizeable orders deserve a careful look at the quote before they go in.
• Micro caps are the volatile end of US equities. The fundamental screens narrow the list; they do not soften the ride, and the fund stays fully invested in the index.spglobal.com

• VB Small companies move harder in both directions than large-cap benchmarks, and this is full, unhedged exposure to that.
• Benchmarks disagree on where small cap starts. VB follows CRSP, while IWM and VTWO track the Russell 2000, so holdings and results can drift apart.
• US companies only, and distributions land quarterly rather than monthly.

Full FDM profile⁠

Full VB profile⁠