Seven With Small-Cap Value, ETF-Style

iShares Russell 2000 Value Index Fund(IWN Quote) is by far the most actively traded of the group. It has more than 1,300 holdings with the largest component weighing in at only 0.32%, so there is no single-stock threat to the index. It is very heavily weighted, 36%, to financial services, but that is misleading, as the fund counts real estate investment trusts (REITs) as part of the financial sector. Relative to this group of ETFs, IWN has a low 1.16% yield, but its return is best of the bunch.

Even though iShares S&P Small-Cap 600/Barra Value (IJS Quote) has less than half the holdings of IWN, the largest component makes up only 1.19% of the fund, so again, investors are protected from a single stock blowing up. The sectors are balanced more evenly as financials and industrials both account for 20% of the fund. Technology is heavier here at 15% compared with just 10% in IWN. IJS yields a similar 1.17%, but its performance has lagged IWN by several percentage points over the last year.

PowerShares Dynamic Small-Cap Value(PWY Quote) adds an element of active management to the equation, but the results have been poor, lagging IWN by four percentage points. It is more expensive, 0.60%, and has had a smaller yield, 0.52%. The stock-selection process is a quantitative approach that screens for companies based on fundamentals, valuations, timeliness and risk profile. While this sound good to me, the process has not given the fund any advantage as of yet.

Vanguard Small-Cap Value Vipers (VBR Quote) has one noticeable differentiating attribute, which is its high yield at 2.22%. Like some of the others, it is heavily tilted to the financial sector (37%) but is relatively light in the tech sector at only 8.4%. If tech turns around and provides some leadership to the market, VBR's light exposure may cause a greater lag to IWN.