Small-Cap Value Investing: ISCV vs. IWN - Finding the Right ETF for Your Portfolio

Performance Comparison: Which ETF Delivered Better Returns?

When evaluating ETF options for best investors, performance often serves as the primary consideration. Over the trailing 12 months (as of January 5, 2026), IWN demonstrated stronger momentum with an 11.92% total return, outpacing ISCV’s 8.78% gain. However, this short-term advantage requires context. Over a five-year horizon, the picture shifts: $1,000 invested in ISCV grew to $1,506, compared to $1,427 in IWN, suggesting ISCV’s longer-term resilience despite lower annual returns.

Both funds exhibited comparable risk profiles, with nearly identical betas (IWN at 1.20 versus ISCV at 1.22) measuring volatility relative to the S&P 500. Maximum drawdowns were also similar—IWN experienced a 5-year decline of -26.70% while ISCV saw -25.34%—indicating that investors faced roughly equivalent downside protection in both cases.

Cost Structure: The Fee Advantage Matters More Than You Think

The expense ratio disparity between these two iShares offerings represents one of the most significant decision points. ISCV charges just 0.06% annually, meaning an investor with $10,000 deployed would pay approximately $6 in yearly fees. IWN’s 0.24% expense ratio translates to $24 annually on the same investment—a four-fold difference.

This seemingly modest fee gap compounds substantially over decades. For a best investors seeking to minimize drag on returns, ISCV’s pricing becomes increasingly attractive. Beyond fees, ISCV also delivers a higher dividend yield at 1.89% compared to IWN’s 1.57%, providing additional annual income that could enhance total returns for income-focused portfolios.

Holdings & Sector Exposure: Understanding the Differences

IWN tracks the Russell 2000 Value Index with 1,419 holdings across the small-cap universe. The fund’s sector weighting reflects a financial services tilt (26% of assets), followed by real estate exposure (12%) and industrials (11%). Among its top positions are EchoStar, Hecla Mining Company, and Oklo, each representing less than 1% of total assets.

ISCV pursues small-cap value exposure through a different lens—the Morningstar Small-Cap Value Index—holding 1,092 stocks. Its sector allocation favors financials (21%), consumer cyclical stocks (15%), and industrials (13%). Leading holdings include Sandisk, Rocket Companies, and Annaly Capital Management, similarly limited to sub-1% weightings.

For best investors with specific sector preferences, this divergence carries weight. Those seeking meaningful real estate exposure might favor IWN’s higher allocation, while investors with a consumer cyclical conviction may prefer ISCV’s positioning.

Liquidity & Market Accessibility

ISCV manages $575 million in assets under management, while IWN commands $12 billion—a 20-fold difference that has meaningful implications for trading dynamics. IWN’s superior AUM translates to tighter bid-ask spreads and smoother execution for large trades, a consideration that matters particularly for institutional investors or those managing substantial positions.

For best investors making routine purchases through dollar-cost averaging or smaller monthly contributions, this liquidity premium may prove irrelevant. However, investors deploying substantial sums or requiring flexibility to exit positions quickly should weigh IWN’s deeper market presence more heavily.

The Decision Framework for Different Investor Types

For cost-conscious investors: ISCV emerges as the clear winner. The 0.06% expense ratio combined with superior dividend yield (1.89% versus 1.57%) creates a meaningful advantage over time, particularly for long-term buy-and-hold best investors.

For performance-seekers: IWN’s recent 12-month outperformance may appeal to those seeking momentum exposure. Yet the five-year data suggests this advantage may be temporary—ISCV actually delivered superior cumulative returns when measured across that longer period.

For liquidity-dependent investors: IWN’s $12 billion AUM provides institutional-quality trading dynamics. Best investors managing large positions or rebalancing frequently should prioritize this accessibility.

For income-focused portfolios: ISCV’s higher dividend yield compounds to meaningful differences in portfolio cash flow. The combination of lower fees and higher income makes ISCV particularly attractive for income-oriented best investors.

Final Considerations

Both the iShares Russell 2000 Value ETF (IWN) and iShares Morningstar Small-Cap Value ETF (ISCV) offer well-diversified exposure to U.S. small-cap value stocks, each holding over 1,000 individual positions that mitigate single-stock concentration risk. The choice between them hinges less on fund quality—both are professionally managed with similar risk profiles—and more on personal priorities around costs, sector preferences, liquidity needs, and income generation.

Best investors typically find that ISCV’s cost efficiency and yield advantage create compelling value, particularly for those with longer investment horizons and smaller to moderate account sizes. IWN appeals to those prioritizing liquidity and real estate exposure alongside its recent performance momentum. Neither fund requires leverage or structural complexity, making both suitable choices for straightforward small-cap value exposure within a diversified portfolio.