VBR vs AVUV

VBR (Vanguard) passively tracks the CRSP US Small Cap Value Index at very low cost. AVUV (Avantis) is actively managed with a systematic, research-driven process that targets deeper value and higher profitability among small companies.

This makes AVUV a more concentrated, higher-conviction expression of the small-cap value factor, while VBR is a lighter, broader tilt.

Studies of factor exposure generally show AVUV loading more heavily on the value and profitability factors than VBR. For investors who specifically want the historical small-cap value premium, that stronger loading is the point.

AVUV charges more than VBR, reflecting its active management — but its expense ratio is still low for a factor fund. The question is whether the deeper tilt justifies the added cost.

If you want inexpensive, diversified small-cap value as a mild tilt, VBR does the job. If you are deliberately targeting the small-cap value premium — as in a Larry Portfolio-style approach — AVUV's stronger factor exposure is usually preferred.

Some investors hold AVUV precisely because a small allocation to a high-loading fund can deliver the intended factor exposure without dominating the portfolio.