IWC vs VB

IWCCiShares Micro-Cap ETF

VBAVanguard Morningstar Small-Cap ETF

In short

IWC Most small-cap funds stop short of here. Since 2005, IWC has tracked the Russell Microcap Index, buying the smallest sliver of the US market in one ticket instead of one lottery-ticket stock at a time.

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

IWC The fund aims to follow the results of an index made up of U.S. micro-cap equities, using the Russell Microcap Index as its underlying 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

• IWC Running since 2005 as a dedicated micro-cap index fund, not a small-cap fund that occasionally wanders down there.
• Rules, not hunches. It follows the Russell Microcap Index and has stayed tight to that mandate rather than drifting up-cap.
• A multibillion-dollar iShares fund with quarterly distributions and the standard big-shop ETF plumbing behind it.
• One ticket spreads the money across the index's whole micro-cap roster, diluting the single-name risk of picking tiny companies yourself.

• 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

• IWC The reach has a price: 0.60% a year, against 0.03% at VB and SCHA and 0.19% at IWM for broad small-cap exposure.
• Micro-caps trade thin and swing hard, and the fund itself is only moderately traded, so spreads can widen in rough markets. Limit orders earn their keep.
• Cash comes quarterly, but this is a growth-and-volatility corner of the market, not an income sleeve.

• 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 IWC profile⁠

Full VB profile⁠