Key Points
The choice between JPMorgan BetaBuilders U.S. Small Cap Equity ETF (NYSEMKT:BBSC) and iShares Morningstar Small-Cap ETF (NYSEMKT:ISCB) involves weighing a more concentrated, momentum-led portfolio against a highly diversified, ultra-low-cost fund.
Small-cap companies often drive long-term growth, though they frequently exhibit greater volatility than their large-cap counterparts. Investors choosing between these two funds are evaluating different ways to access this segment, focusing on either high-breadth indexing or a more targeted selection of small-cap firms.
Snapshot (cost & size)
MetricISCBBBSCIssueriSharesJ.P. MorganShare price$75.02 (as of 2026-07-02)$90.72 (as of 2026-07-02)Expense ratio0.04%0.09%1-yr return (as of July 2, 2026)27.80%35.80%Dividend yield1.30%1.00%Beta1.051.13AUM$285.4 million$708.1 million
Beta measures price volatility relative to the S&P 500; beta is calculated from five-year monthly returns. The 1-yr return represents total return over the trailing 12 months. Dividend yield is the trailing-12-month distribution yield as of the July 2 market closing price.
The iShares Morningstar Small-Cap ETF is the more affordable choice with a 0.04% expense ratio, which is 0.05 percentage points lower than its competitor. It also provides a slightly higher payout for income-seeking investors.
Performance & risk comparison
MetricISCBBBSCMax drawdown (5 yr)(29.90%)(31.00%)Growth of $1,000 over 5 years (total return)$1,379.00$1,440.00
What’s inside
JPMorgan BetaBuilders U.S. Small Cap Equity ETF focuses its portfolio on Technology (18.9%), Healthcare (16.8%), and Financial Services (15.7%). Its largest positions include cash through a JP Morgan U.S. government money market fund (1%), Semtech (NASDAQ:SMTC) at 0.6%, and FormFactor Inc (NASDAQ:FORM) (0.5%). The fund currently holds 728 positions and was launched in 2020. JPMorgan BetaBuilders U.S. Small Cap Equity ETF has paid $0.90 per share over the trailing 12 months, which, on its recent ~$91 share price, works out to a 1% yield.
The iShares Morningstar Small-Cap ETF tracks a benchmark of 1,557 stocks, offering broader diversification across Industrials (18.2%), Financial Services (15.9%), and Technology (15.6%). Its top holdings include Sterling Infrastructure (NASDAQ:STRL) at 0.4%, Okta (NASDAQ:OKTA) at 0.36%, Guardant Health (NASDAQ:GH) at 0.3%. This fund was launched in 2004. iShares Morningstar Small-Cap ETF has paid $0.95 per share over the trailing 12 months, which, on its recent ~$75 share price, works out to a 1.30% yield.
Which fund is the better buy?
The iShares Morningstar Small-Cap ETF is the more established of these two small-cap funds, having returned an annualized 8.35% since its inception in 2004. Its performance has been good in short-term frames as well, delivering returns of 16.8% and 6.8% over the 3-year and 5-year look-backs. Its fundamental difference from the JPMorgan small-cap offering is that this ETF tracks a slightly broader Morningstar index, providing greater exposure to a broader range of small caps.
By comparison, the JPMorgan BetaBuilders U.S. Small Cap Equity ETF tracks a narrower version of the Morningstar index, which excludes several microcaps and stocks not considered easily investible due to liquidity constraints. Interestingly, BBSC is more concentrated in small caps, with 97% of its portfolio in small caps and 3% in mid-caps, compared to 9% in mid-caps for the iShares edition.
Still, overall, both give excellent exposure to small-cap U.S. stocks. The main difference, then, is performance. Here, the JPMorgan ETF wins out. It’s up about 24% year-to-date compared to 16.8% for ISCB, and beats the iShares ETF by 2.4 percentage points over the past three years and 1.07 percentage points over the past five years. BBSC has a higher expense ratio, but at 0.09%, it’s close to the low end for ETFs. The JPMorgan BetaBuilders U.S. Small Cap Equity ETF wins out.
For more guidance on ETF investing, check out the full guide at this link.
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Brendan Coffey has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Guardant Health, Okta, and Sterling Infrastructure. The Motley Fool has a disclosure policy.
