FLQS vs VONV

FLQSCFranklin U.S. Small Cap Multifactor Index ETF

VONVAVanguard Russell 1000 Value ETF

In short

FLQS Four screens (value, quality, momentum, low volatility) run across about 500 small U.S. companies. Franklin's LibertyQ recipe, live since 2017: small-cap breadth with a rules-based tilt instead of a plain size index.

VONV The plain-vanilla value trade, done cheap: about 900 large US value stocks, full replication of the Russell 1000 Value Index, 0.06% a year. No factor cocktail, no premium price tag, and one of the strongest implementations in its factor peer group.

Stated mandate

FLQS The Fund seeks to track, before fees and expenses, the LibertyQ U.S. Small Cap Equity Index. It normally invests at least 80% of assets in the index's component securities.

VONV The fund seeks to track the Russell 1000 Value Index, representing large-capitalization value stocks in the United States. It uses passive indexing and full replication to remain closely aligned with that benchmark.

Why people hold it

• FLQS Four factors in one ticket: value, quality, momentum and low volatility, blended by index rule rather than by a manager's mood.
• Roughly 500 names spread single-stock accidents thin, which counts for more in small caps than anywhere else on the risk spectrum.
• Sticks close to its LibertyQ benchmark, so the index rulebook is a fair description of what actually sits in the portfolio.
• Same mandate since its 2017 launch, with income paid out quarterly.

• VONV 0.06% a year, a fraction of the typical fee among factor ETFs. On a rules-based value index there is little room for cleverness, so cost does most of the work.vanguard.com
• Full replication, not sampling: it owns the index's roughly 900 names and has stayed tightly aligned with the Russell 1000 Value benchmark since launching in 2010.
• Same Russell benchmark as pricier rivals for less: the Goldman MarketBeta version (GVUS) charges 0.12% to track the identical value index.
• A multi-billion-dollar fund that trades actively, among the easiest in its group to get in and out of, and it distributes quarterly.

Worth knowing

• FLQS 0.35% a year sits a shade above the typical multifactor peer, and above cheaper rules-based options such as FNDX at 0.25%.
• One of the lighter-traded funds in its category, so bid-ask spreads can add cost beyond the headline fee.
• Small caps swing harder than large caps. The low-volatility screen softens that ride, it does not remove it.

• VONV One screen, one style. Value only, with no quality or momentum overlay, so the ride follows the value side of the market wherever it goes.vanguard.com
• This is the entire value bucket, not a best-ideas portfolio. About 900 holdings means results hug the large-cap value category rather than stray from it.
• Cheaper exists nearby: Vanguard's VYM charges 0.04%, but it screens for dividend yield, a different portfolio than a Russell value index.

Full FLQS profile⁠

Full VONV profile⁠