Key Points
When hunting for undervalued U.S. stocks, investors don’t have to pick just one corner of the market. Two popular value funds — the iShares S&P Mid-Cap 400 Value ETF (NYSEMKT:IJJ) and the State Street SPDR S&P 600 Small Cap Value ETF (NYSEMKT:SLYV) — offer very different ways to invest in the same theme.
Snapshot (cost & size)
MetricSLYVIJJIssuerState StreetiSharesExpense ratio0.15%0.18%1-year return (as of July 9, 2026)31.36%16.24%Dividend yield1.81%1.59%Beta1.070.96AUM$4.8 billion$8.7 billion
Beta measures price volatility relative to the S&P 500; beta is calculated from five-year monthly returns. The 1-year return represents total return over the trailing 12 months. Dividend yield is the trailing-12-month distribution yield.
SLYV is the cheaper of the two funds, charging a 0.15% expense ratio versus 0.18% for IJJ. It also pays more in dividends, with a yield that’s 0.22 percentage points higher than IJJ’s.
Performance & risk comparison
MetricSLYVIJJMax drawdown (5 yr)(28.68%)(22.67%)Growth of $1,000 over 5 years (total return)$1,418$1,521
Launched in 2000, IJJ tracks a benchmark of mid-sized U.S. equities that screen as undervalued. Its portfolio spans 304 stocks, led by US Foods (NYSE:USFD) at 1.3%, TD SYNNEX (NYSE:SNX) at 1.2%, and Reliance (NYSE:RS) at 1.1%. The fund’s top sectors include financial services at 21.8%, industrials at 19.1%, and consumer cyclical at 14.0%.
SLYV tracks the S&P SmallCap 600 Value Index, focusing on the smaller end of the market-cap spectrum. SLYV casts a wider net with 462 different securities, and its largest positions include Molina Healthcare (NYSE:MOH) at 1.3%, Match Group (NASDAQ:MTCH) at 1.0%, and Eastman Chemical (NYSE:EMN) at 0.8%. Its top sectors include financial services at 20.2%, consumer cyclical at 15.2%, and technology at 13.4%. SLYV was also launched in 2000.
For more guidance on ETF investing, check out the full guide at this link.
What this means for investors
Deciding between these two ETFs is really a question about how much risk you want to take on for a similar style of investing.
Mid-cap value funds like IJJ tend to hold more established companies — names with steadier cash flows and, often, less dramatic price swings — which is part of why IJJ has seen a lower five-year maximum drawdown than SLYV. On the other hand, SLYV offers greater exposure to smaller companies that are earlier in their growth curve — but it also has a lower expense ratio and a higher dividend yield.
Market-cap exposure is one of the biggest — and most overlooked — decisions in building a diversified portfolio. Investors who only own mega-cap or large-cap funds can miss out on the return potential smaller companies have historically offered over full market cycles, even if that potential comes with bumpier rides along the way. On the other hand, tilting too far into small caps can mean more volatility than some investors are comfortable holding, especially late in an economic cycle when smaller, more leveraged companies are typically the first to feel the pinch.
Either fund can be the right choice depending on what you’re looking for. Investors who prioritize stability and are willing to accept a slightly higher cost may lean toward IJJ, while those seeking higher income and lower fees — and who can stomach more volatility — may prefer SLYV. Some investors might also choose to split the difference, holding both to get exposure across the value spectrum.
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Andy Gould has no position in any of the stocks mentioned. The Motley Fool recommends Match Group. The Motley Fool has a disclosure policy.
