Wealthy PotAVUV vs VBR: One Fund Picks the Stocks, the Other Buys a List
AVUV is an actively managed fund that screens small US companies on value and on profitability. VBR is an index fund that buys whatever its index provider says is small-cap value. AVUV charges 0.25%, VBR charges 0.05%, so AVUV costs exactly five times as much. Over the five years to 31 August 2026 AVUV returned 12.48% a year against VBR's 9.36%, but AVUV has only been trading since September 2019 and it has trailed its own stated benchmark over the last one and three years. Pay the higher fee only if you specifically want the profitability screen and the deeper value tilt, and expect stretches where it does not pay.
Table of Contents
The Short Answer
- They are not two versions of the same fund. AVUV's prospectus says the fund "is an actively managed exchange-traded fund (ETF) that does not seek to replicate the performance of a specified index." VBR's says it "employs an indexing, or passive, investment approach."
- The fee gap is 0.20 percentage points, five times over. AVUV: 0.25%. VBR: 0.05%. That is deducted every year whether or not the strategy works.
- Only one of them screens on profitability. AVUV defines profitability in its own prospectus as "adjusted cash from operations to book value ratio." The word does not appear in VBR's strategy at all, because VBR outsources the definition of value to its index provider.
- The portfolios are genuinely different. At 31 August 2026 AVUV held 796 stocks at a weighted average market cap of $4.00bn and a price-to-book of 1.49. VBR held 834 at a median market cap of $10.4bn and a price-to-book of 2.0.
- AVUV has won so far, over a short window. Five years to 31 August 2026: 12.48% a year against 9.36%. AVUV has no ten-year record. VBR's is 10.52%.
- AVUV has also been losing to its own benchmark lately. Over the year to 31 August 2026 it returned 27.05% against the Russell 2000 Value Index's 29.95%, and over three years 17.36% against 17.93%.
- VBR quietly changed its name in July 2026. It is now the Vanguard Morningstar Small-Cap Value ETF, tracking the Morningstar US Small Cap Value Index. Same ticker, same CUSIP, same strategy.
"Small Cap Value" Is Not One Standard Thing
There is no official definition of a small-cap value stock. There is no regulator, no accounting board and no industry body that publishes one. Every fund that uses the phrase has picked a rule, and the rules differ enough to produce different portfolios.
AVUV writes its rule into its own prospectus. VBR does not write one at all, because it does not need to: it buys an index, and the index provider decides. Vanguard's prospectus is explicit about how little say Vanguard has:
"Each Fund's constituents are reviewed and rebalanced by the Fund's index provider on a quarterly basis and are likely to change over time. The Target Indexes are owned, calculated, and controlled by the index provider in its sole discretion. Neither the advisor nor any of its affiliates has discretion to select Target Index components or change a Target Index's methodology."
That is the whole comparison in one paragraph. One fund has a stated opinion about which small companies are worth owning. The other has deliberately declined to have one, in exchange for a much lower fee and complete predictability.
Neither position is wrong. The question this page tries to answer honestly is what the extra 0.20 percentage points a year is buying, and how much of the evidence for it is actually evidence.
The Fund Vanguard Renamed in July
If you compare these two funds anywhere else on the internet you will be told that VBR tracks the CRSP US Small Cap Value Index. That stopped being true on 29 July 2026.
Morningstar bought the Center for Research in Security Prices, and Vanguard's board renamed ten funds and their target indexes as a result. Vanguard's own supplement puts it plainly:
"Morningstar, Inc. ('Morningstar') has announced the acquisition of the Center for Research in Security Prices ('CRSP') and its CRSP Market Indexes. As a result of these changes, the board of trustees of Vanguard Index Funds has approved the renaming of ... Vanguard Small-Cap Value Index Fund ... The name changes are effective as of July 29, 2026. Each Fund's investment objective, strategies, and polices remain unchanged."
So the fund is now the Vanguard Morningstar Small-Cap Value Index Fund, the ETF share class is the Vanguard Morningstar Small-Cap Value ETF, and the target index is the Morningstar US Small Cap Value Index. The ticker is still VBR. The CUSIP is still 922908611. Nothing you own changed.
Worth keeping an eye on all the same. A renaming is not a methodology change, but the index is now owned by a different company, and Vanguard has told you in writing that the index provider controls the methodology "in its sole discretion." We will re-read Vanguard's supplements at every refresh of this page.
AVUV vs VBR Side by Side
| AVUV | VBR | |
|---|---|---|
| Full name | Avantis U.S. Small Cap Value ETF | Vanguard Morningstar Small-Cap Value ETF |
| Management style | Actively managed | Index |
| Adviser | American Century Investment Management, Inc. (Avantis Investors is a division of it) | Vanguard Portfolio Management |
| Index tracked | None | Morningstar US Small Cap Value Index |
| Benchmark it reports against | Russell 2000 Value Index | Its own target index |
| Expense ratio | 0.25% | 0.05% |
| Prospectus cost example on $10,000 over 10 years | $319 | $64 |
| Inception | 24 September 2019 | 26 January 2004 |
| Holdings | 796 | 834 |
| Market cap | $4.00bn weighted average | $10.4bn median |
| Price to book | 1.49 | 2.0 |
| Price to earnings | 12.27 | 16.9 |
| Portfolio turnover | 6% (fiscal year to 31 Aug 2025) | 25% (fiscal year to 31 Dec 2025) |
| 30-day SEC yield | 1.24% | 1.90% |
| 30-day median bid-ask spread | 0.02% | 0.042% |
| Net assets | $27.1bn (31 May 2026, SEC Form N-PORT); $30.7bn on the fund page, undated | $37.3bn in the ETF share class; $68.2bn across all share classes |
| Exchange | NYSE Arca | NYSE Arca |
| Distributions | Quarterly | Quarterly, in March, June, September and December |
Two lines in that table need a warning label. The market cap figures are different statistics. Avantis publishes a weighted average, Vanguard publishes a median, and the two cannot be subtracted from each other. Both are printed here with the label the issuer used. The gap is large enough that AVUV is clearly holding smaller companies, but $4.00bn against $10.4bn overstates it.
The turnover figures are also worth a second look, because they are the opposite way round from what you would expect. The active fund turned over 6% of its portfolio in its last fiscal year. The index fund turned over 25%. Tracking an index that is rebalanced quarterly is not a low-activity job.
The Screen VBR's Prospectus Never Mentions
Here is the sentence that separates these funds. It is from AVUV's prospectus, under Principal Investment Strategies:
"The fund seeks to achieve higher expected returns by selecting securities of companies with higher profitability and value characteristics, as well as smaller market capitalizations relative to others within the fund's small cap investment universe. ... The portfolio managers define 'value characteristics' mainly as adjusted book/price ratio (though other price to fundamental ratios may be considered). The portfolio managers define 'profitability' mainly as adjusted cash from operations to book value ratio (though other ratios may be considered)."
Three tilts, stated in the fund's own words: smaller, cheaper on book value, and more profitable measured by cash from operations against book equity. The last one is the point. A cheap company that burns cash and a cheap company that generates cash both look like value on a price-to-book screen. AVUV is trying to hold more of the second kind.
Weighting follows the same logic:
"To determine the weight of a security within the portfolio, the portfolio managers use the market capitalization of the security relative to that of other eligible securities as a baseline, then overweight or underweight the security based on the characteristics described above."
So it starts from market cap weights, like an index fund, and then deliberately moves away from them. That is what "systematic active" means in practice: rules, applied daily, by people who can change the rules.
Now compare VBR. Its entire principal investment strategy is one paragraph:
"The Fund employs an indexing investment approach designed to track the performance of the CRSP US Small Cap Value Index (the 'Target Index'), a broadly diversified index of value stocks of small U.S. companies, as determined by the index provider. Under normal circumstances, the Fund invests at least 80% of its net assets ... in the stocks that make up the Target Index. The Fund attempts to replicate the Target Index by investing all, or substantially all, of its assets in the stocks that make up the Target Index, holding each stock in approximately the same proportion as its weighting in the Target Index."
The operative phrase is "as determined by the index provider." Vanguard's prospectus tells you the index is float-adjusted and market-cap weighted, that it has no cap on the number of constituents, and that it covers "85% to 98% of cumulative market capitalization" of the total US market index. It does not tell you what makes a stock a value stock, and it does not mention profitability anywhere.
One thing we could not verify, so we will not claim it. We tried to pull the index provider's own methodology document to list the factors the Morningstar US Small Cap Value Index actually screens on. The CRSP site no longer publishes a reachable methodology guide, and every Morningstar index detail URL we tried returned an error. So this page says only what Vanguard's prospectus says. If you want the factor list, ask Morningstar Indexes directly.
The universes also differ. AVUV defines small caps three ways at once:
"The portfolio managers consider the following to be small capitalization companies: (i) companies smaller than the largest 1000 U.S. companies; (ii) companies representing the bottom 10% of the market capitalization of all U.S. listed companies; and (iii) companies in the fund's benchmark."
And it puts a number on the ceiling: as of 30 September 2025 the largest company that could count as small for its 80% test had a market capitalisation of about $22.0bn, the biggest name in the Russell 2000 Value Index. VBR's index, by contrast, is defined by where a company sits in the cumulative market cap of the whole US market, which is a different carve entirely. As of 31 December 2025 that index held 842 constituents.
Two Portfolios That Do Not Look Alike
You can see the different rules in the finished portfolios. Both issuers published sector weights as of 31 August 2026.
| Sector | AVUV | VBR |
|---|---|---|
| Financials | 28% | 18.1% |
| Consumer Discretionary | 18% | 14.0% |
| Energy | 17% | 5.2% |
| Industrials | 15% | 20.1% |
| Consumer Staples | 5% | 4.2% |
| Materials | 5% | 5.1% |
| Technology | 5% | 8.7% |
| Health Care | 4% | 9.3% |
| Communication Services | 3% | 0.7% |
| Real Estate | 1% | 9.9% |
| Utilities | <1% | 4.8% |
Read the bolded rows. AVUV holds roughly three times as much energy and almost no real estate or utilities. VBR holds close to ten percent in real estate and another five in utilities. Classification differences explain a fraction of a point here and there. They do not explain 9.9% against 1%.
We have not established the mechanism. AVUV's prospectus does not say it excludes REITs or utilities, and we are not going to assert a rule the issuer has not written down. What we can say is that a profitability screen measured as cash from operations against book equity is going to look very unkindly at capital-heavy, debt-funded, asset-revaluation businesses, and that the published weights are consistent with that.
The other visible difference is depth of value. AVUV's price-to-book is 1.49 and its price-to-earnings is 12.27. VBR's are 2.0 and 16.9. Each issuer computes its own aggregate, so treat these as indicative rather than to two decimal places, but the direction is unambiguous: VBR's index calls a lot of companies "value" that AVUV would not buy at all.
If the phrase "value stock" is still doing vague work in your head, our explainer on growth stocks versus value stocks covers the underlying idea before you pick a wrapper for it.
What the Record Actually Shows
Both issuers publish trailing returns as of 31 August 2026, which gives one clean head-to-head date. Everything below is net asset value, net of fees, annualised for periods over a year.
| Annualized to 31 Aug 2026 | AVUV | VBR | AVUV minus VBR |
|---|---|---|---|
| Year to date | 23.32% | 17.01% | +6.31 |
| 1 year | 27.05% | 19.86% | +7.19 |
| 3 years | 17.36% | 15.74% | +1.62 |
| 5 years | 12.48% | 9.36% | +3.12 |
| 10 years | no record | 10.52% | not comparable |
| Since own inception | 15.92% (from 24 Sep 2019) | 9.48% (from 26 Jan 2004) | different periods |
Now the part that most comparisons leave out. Each fund also reports against a benchmark, and AVUV's recent record against its own benchmark is not flattering.
| Annualized to 31 Aug 2026 | AVUV | Russell 2000 Value Index | Difference |
|---|---|---|---|
| 1 year | 27.05% | 29.95% | −2.90 |
| 3 years | 17.36% | 17.93% | −0.57 |
| 5 years | 12.48% | 8.52% | +3.96 |
| 10 years | no record | 10.08% | not comparable |
VBR's equivalent is dull, which is the point of an index fund. Against its own benchmark it trailed by 0.05 percentage points over one year, 0.02 over three, 0.01 over five and 0.00 over ten. That is a 0.05% fee doing exactly what a 0.05% fee should do.
Calendar years tell the same story with more texture.
| Calendar year, NAV total return | AVUV | VBR | Russell 2000 Value |
|---|---|---|---|
| 2025 | 7.50% | 9.09% | 12.59% |
| 2024 | 9.33% | 12.39% | 8.05% |
| 2023 | 22.65% | 16.00% | 14.65% |
| 2022 | −4.82% | −9.29% | −14.48% |
| 2021 | 42.29% | 28.07% | 28.27% |
| 2020 | 6.60% | 5.82% | 4.63% |
AVUV won 2021, 2022, 2023 and 2020. It lost 2024 and 2025. Four wins and two losses in six years is a long way from a settled result, and the two losses are the most recent two.
What That Record Does Not Establish
AVUV has beaten VBR over every trailing period both funds report. It would be easy to write that the active approach works. It would also be wrong, for four reasons, and this section is the reason this page exists.
One: the record is short. AVUV started trading on 24 September 2019. That is about seven years. VBR started on 26 January 2004. A seven-year sample of a strategy whose whole premise is a long-run risk premium is not enough to separate skill from a favourable stretch for small, cheap, profitable companies. Nobody who studies factor returns treats seven years as decisive, and neither should you.
Two: the comparison is not like for like. AVUV holds smaller companies at a lower price-to-book than VBR. When small and cheap does well, AVUV should beat VBR without anybody being clever. That is not a bonus, it is the exposure you bought. The interesting question is whether the profitability screen adds anything on top, and the published data cannot answer it. Neither issuer publishes a return attribution, and we are not going to invent one.
Three: AVUV has been losing to its own benchmark. Over the year to 31 August 2026 it returned 27.05% against the Russell 2000 Value Index's 29.95%. Over three years, 17.36% against 17.93%. A fund whose case rests on beating passive small-cap value has, on the most recent evidence it publishes itself, not been doing that. It did over five years, comfortably. Both facts are true at once, and any page that shows you only one of them is selling something.
Four: the future is not a rerun. The strategy that produced 42.29% in 2021 produced 7.50% in 2025 while its own benchmark made 12.59%. Extrapolating the good years is how investors end up buying the top of a factor cycle. If you want a general grounding on this, our piece on choosing between active and passive investing covers the trade-off without a specific fund attached.
What the record does establish is narrower and still useful: AVUV has delivered meaningfully different returns from VBR, in both directions, in individual years. It is not a closet index fund. You are genuinely choosing a different portfolio.
A Certain Cost Against an Uncertain Benefit
The asymmetry is the thing to hold on to. The 0.20 percentage point fee gap is certain. The return advantage is not.
Both prospectuses publish the same standard cost illustration, so this is a like-for-like comparison from the issuers themselves.
| Cost of a $10,000 investment | 1 year | 3 years | 5 years | 10 years |
|---|---|---|---|---|
| AVUV | $26 | $81 | $141 | $319 |
| VBR | $5 | $16 | $28 | $64 |
| Difference | $21 | $65 | $113 | $255 |
Two hundred and fifty-five dollars over a decade on ten thousand is not a catastrophe, and anyone telling you the fee alone disqualifies AVUV is being lazy. But it is the one number in this comparison you can be sure about in advance. Everything else is a hope.
Framed as a hurdle: AVUV has to out-pick VBR's index by 0.20 percentage points a year just to draw level, and by more than that to justify the extra complexity and the tracking uncertainty. Over the five years to 31 August 2026 it cleared that hurdle by a wide margin. Over the last twelve months against its own benchmark, it did not.
One more cost worth knowing about, in the other direction. VBR's expense ratio has been falling: its prospectus dated 28 April 2025 showed 0.07%, and the 28 April 2026 prospectus shows 0.05%, restated to reflect current fees. Any source still quoting 0.07% for VBR is out of date. AVUV's 0.25% is a unified fee, out of which the adviser pays essentially all of the fund's operating costs.
The figures above are backward-looking arithmetic and issuer-prepared illustrations, not projections. This is educational information, not personalized investment advice. All investing carries the risk of loss, and past performance does not guarantee future results.
You can run the fee difference against your own contribution schedule with the compound interest calculator.
Which One Fits You
Choose VBR if small-cap value is a slice of a broad portfolio rather than a conviction, or if you want the cheapest, most predictable exposure you can buy. You will get whatever the index provider calls value, at 0.05%, with tracking that has been within 0.05 percentage points of the benchmark over every period Vanguard publishes. It has a twenty-two year record. There is nothing to monitor except the fee.
Choose AVUV if you specifically want the profitability screen and the deeper value and smaller size tilts, understand that this is an active fund, and are prepared to hold it through periods when it loses to plain small-cap value. That is not a hypothetical: it has happened over the last one and three years. If you would abandon it after two bad calendar years, do not buy it, because two bad calendar years is a normal outcome for a factor tilt.
Do not buy both expecting diversification. They are both US small-cap value funds. The overlap is unknown to us, because Vanguard's holdings detail was unavailable on the day we checked and we will not guess at a number, but two funds fishing the same pond are not two exposures.
If you already hold VBR in a taxable account, switching is a taxable event. A long-held position in a fund that has returned 10.52% a year over ten years probably carries a large unrealised gain, and recovering a few percentage points a year of hoped-for outperformance can take a long time to outweigh a capital gains bill today. Redirecting new contributions is the low-friction version. Inside an IRA or a 401(k) there is no such friction.
Before either, check whether you need a small-cap value fund at all. If your core holding is a total-market fund, you already own these companies at market weight; the question is only whether you want more of them. Our VTI vs VOO comparison covers the core decision, and ETF versus index fund covers the wrapper.
Sources & Methodology
Every figure on this page was read from an issuer's own SEC filing or the issuer's own fund page. None came from a fund screener, a data aggregator or another comparison site.
- American Century ETF Trust, Form 485BPOS filed 29 December 2025: contains the Avantis U.S. Small Cap Value ETF prospectus dated 1 January 2026. Source for the active-management language, the value and profitability definitions, the weighting method, the 80% policy and the $22.0bn small-cap ceiling, the 0.25% fee table, the cost example, the 6% turnover, the inception date, and the standardized returns to 31 December 2024.
- Avantis, AVUV fund page: holdings count, weighted average market cap, price-to-book, price-to-earnings, sector weights, 30-day SEC yield, bid-ask spread, assets in the share class, and the trailing and calendar-year returns for the fund and the Russell 2000 Value Index.
- AVUV Form N-PORT-P for the period ended 31 May 2026: net assets of $27,077,642,292.44 and 798 portfolio positions at that date.
- Vanguard Index Funds, Form 485BPOS filed 28 April 2026: the ETF Shares prospectus for VBR. Source for the indexing language, the index provider's sole discretion, the target index description, the 0.05% fee table, the cost example, the 25% turnover, the 842 index constituents and the standardized returns to 31 December 2025.
- Vanguard Index Funds, Form 497 filed 29 July 2026: the renaming of the fund and of the target index following Morningstar's acquisition of CRSP.
- Vanguard, VBR fund page: expense ratio and its as-of date, inception date, holdings count, median market cap, price ratios, return on equity, sector weights, 30-day SEC yield, bid-ask spread, net assets, and the average annual and calendar-year returns.
- Vanguard Index Funds, Form 485BPOS filed 29 April 2025: used only to confirm that VBR's expense ratio was 0.07% a year earlier.
What we could not verify, stated rather than guessed. We could not obtain the index provider's own methodology document for the Morningstar US Small Cap Value Index: the CRSP site no longer publishes a reachable methodology guide and the Morningstar Indexes detail pages we tried returned errors. So this page describes VBR's index only in the words Vanguard's prospectus uses, and does not list what the index screens on. We could not establish why AVUV holds 1% in real estate and under 1% in utilities; its prospectus states no exclusion, so we report those as published weights and not as a rule. Vanguard's holdings detail was returning "This information is temporarily unavailable" on 28 September 2026, so this page contains no top-ten comparison and no overlap estimate. Neither issuer publishes a return attribution, so the gap between AVUV and VBR is not broken down into size, value, profitability or luck. The two issuers' market cap figures are a weighted average and a median respectively and are not directly comparable, and their sector schemes differ. AVUV cannot have a ten-year record before 24 September 2029.
This article is for general education and is not investment, tax or legal advice. Fund data changes daily, index returns are unmanaged and cannot be invested in directly, small-company stocks have historically been more volatile than larger ones, and past performance does not guarantee future results. All investing carries the risk of loss. Check current figures with the issuer and consider speaking with a licensed financial professional before making a decision.
FAQ: AVUV vs VBR
Is AVUV better than VBR?
Over the five years to 31 August 2026, AVUV returned 12.48% a year against VBR's 9.36%, so on that record it has been better. It is also five times more expensive, it has only existed since September 2019, and it has trailed its own Russell 2000 Value benchmark over the last one and three years. A five-year win is not proof that a strategy works. If you want cheap and predictable, VBR. If you specifically want the profitability screen and a deeper value tilt, AVUV, with your eyes open.
What is the actual difference between AVUV and VBR?
AVUV is actively managed and picks stocks on value and profitability; its prospectus says it "does not seek to replicate the performance of a specified index." VBR tracks the Morningstar US Small Cap Value Index and holds each stock in roughly its index weight. AVUV charges 0.25%, VBR charges 0.05%.
Why is AVUV so much more expensive?
Because somebody is making decisions. AVUV's 0.25% is a unified management fee out of which the adviser pays essentially all of the fund's operating costs. VBR's 0.05% buys replication of a list that a third party maintains. The 0.20 percentage point gap is deducted from your return every year regardless of results.
Does AVUV actually screen on profitability?
Yes, and it says so in the prospectus: it defines profitability "mainly as adjusted cash from operations to book value ratio." VBR's prospectus does not mention profitability at all. It describes its index as representing "the value style ... as determined by the index provider."
Why did VBR change its name?
Morningstar acquired the Center for Research in Security Prices and its CRSP indexes. Vanguard's board renamed ten funds and their target indexes effective 29 July 2026. VBR is now the Vanguard Morningstar Small-Cap Value ETF and its index is the Morningstar US Small Cap Value Index. Vanguard's supplement states that each fund's objective, strategies and policies are unchanged, and the ticker and CUSIP are unchanged.
Do AVUV and VBR hold the same stocks?
Some of the same ones, in very different amounts. At 31 August 2026 AVUV held 796 positions at a weighted average market cap of $4.00bn and a price-to-book of 1.49; VBR held 834 at a median market cap of $10.4bn and a price-to-book of 2.0. Their published sector weights differ sharply, most obviously 17% against 5.2% in energy and 1% against 9.9% in real estate. We could not obtain VBR's current holdings list, so we do not publish an overlap percentage.
Should I own both AVUV and VBR?
Owning both mostly averages the two strategies and the two fee levels while adding a second line to your statement. They are both US small-cap value funds, not two different asset classes. Pick the definition of value you actually believe in.
How long a record does AVUV have?
It began trading on 24 September 2019, so about seven years. It has no ten-year figure and will not have one until 24 September 2029. VBR started on 26 January 2004 and has a ten-year annualised return of 10.52% to 31 August 2026. Any ten-year AVUV number you find elsewhere is not a live fund record.
Which is better in a Roth IRA?
The tax treatment is identical, since neither fund's distributions are taxed inside the account, so the choice comes down to the same question as anywhere else: cheap index exposure or a paid-for factor tilt. A tax-advantaged account does make it easier to switch later, because selling triggers no tax bill. If the position is in a taxable account instead, weigh the capital gains cost of switching against a return advantage that is not guaranteed.
Cite This Page
Journalists, educators and bloggers are welcome to cite this comparison. Please link back so readers can reach the underlying filings.
"AVUV vs VBR: One Fund Picks the Stocks, the Other Buys a List." Wealthy Pot, 2026. https://wealthypot.com/avuv-vs-vbr/
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