The iShares Russell 2000 ETF (IWM), a popular broad small-cap fund, returned 34.93% over five years ending June 2026, while the Avantis U.S. Small Cap Value ETF (AVUV), which screens for cheaper and more profitable small caps, returned 71.36%. AVUV's focused strategy excludes weaker companies and tilts toward value and profitability factors, resulting in significantly higher returns despite a slightly higher fee (0.25% vs. 0.19%). Investors should consider tax implications and risk tolerance before switching, as AVUV is more concentrated in sectors like regional banks and energy and may lag during growth-led markets. For broad, unfiltered small-cap exposure, IWM remains suitable, but AVUV offers a compelling alternative for long-term investors seeking better returns through targeted factor exposure.
