ISCB vs. BBSC: Which Small-Cap ETF Is the Better Buy for Long-Term Investors?

Andy Gould, The Motley Fool

Wed, June 10, 2026 astatine 6:12 AM CDT 4 min read

The prime betwixt the JPMorgan BetaBuilders U.S. Small Cap Equity ETF (NYSEMKT:BBSC) and the iShares Morningstar Small-Cap ETF (NYSEMKT:ISCB) comes down to a acquainted investing trade-off: concentrated caller show versus broader, lower-cost diversification.

Small-capitalization stocks connection important maturation imaginable but often travel with higher volatility than large-cap peers. Investors seeking small-cap vulnerability often look for low-cost, passively managed funds similar these two.

Snapshot (cost & size)

Beta measures terms volatility comparative to the S&P 500; beta is calculated from five-year monthly returns. The 1-yr instrumentality represents full instrumentality implicit the trailing 12 months. Dividend output is the trailing-12-month organisation yield.

The iShares money is the little costly option, with a 0.04% disbursal ratio, compared to BBSC’s 0.09%. It besides provides a higher dividend yield. For investors focused connected semipermanent superior efficiency, that’s an charismatic combination.

Performance & hazard examination

What's wrong

The iShares Morningstar Small-Cap ETF (ISCB) mirrors a benchmark of smaller U.S. companies, offering heavy diversification done its 1,500+ holdings. Its portfolio leans toward industrials astatine 18%, with exertion and fiscal services each representing 16%. Due to the ample fig of holdings, adjacent the fund’s apical idiosyncratic positions are comparatively small, which mitigates single-stock risk. Its largest positions see Lumentum Holdings Inc. (NASDAQ:LITE) astatine 0.98%, Revolution Medicines Inc. (NASDAQ:RVMD) astatine 0.47%, and Sterling Infrastructure Inc. (NASDAQ:STRL) astatine 0.42%.

The JPMorgan BetaBuilders U.S. Small Cap Equity ETF (BBSC) offers a much concentrated illustration with 700+ holdings, targeting companies successful the 95th to 99th percentiles of disposable marketplace capitalization. Like ISCB, the ample fig of holdings provides wide diversification, though BBSC maintains a heavier tilt toward exertion astatine 20%, portion fiscal services and healthcare relationship for 17% and 16%, respectively. Its largest positions see TTM Technologies Inc. (NASDAQ:TTMI) astatine 0.84%, SiTime Corp. (NASDAQ:SITM) astatine 0.78%, and Semtech Corp. (NASDAQ:SMTC) astatine 0.73%.

For much guidance connected ETF investing, cheque retired the afloat usher astatine this link.