ISOvsVSO
Small companies ETFs: different indexes, different exposures.
iShares S&P/ASX Small Ordinaries ETF · Vanguard MSCI Australian Small Companies Index ETF
ISO tracks the S&P/ASX Small Ordinaries; VSO tracks the MSCI Australia Small Companies index - similar but not identical universes, so holdings can diverge. Small caps add diversification beyond the large-cap-heavy ASX 200 but come with higher volatility and lower liquidity.
Score Breakdown
Fund Profiles
Managed by BlackRock's iShares, ISO provides exposure to Australian small-cap equities by tracking the S&P/ASX Small Ordinaries Index, covering approximately 200 companies that sit below the ASX 100 by market capitalisation. These smaller companies represent the bottom tier of the ASX 300, offering greater growth potential but also higher volatility and wider bid-ask spreads compared to large-cap counterparts. Growth-oriented investors looking to complement a core ASX 200 holding with small-cap exposure will find ISO a straightforward way to capture this segment of the Australian market.
Vanguard manages VSO, an ASX-listed ETF providing exposure to Australian small-cap equities by tracking the MSCI Australian Small Companies Index. Importantly, VSO uses a different index provider and methodology compared to iShares' ISO, resulting in different stock selection, weightings, and number of holdings despite both targeting the small-cap segment. Growth-oriented investors looking to add Australian small-cap diversification to a core large-cap holding - and who prefer Vanguard's index construction approach - will find VSO a worthy option to consider alongside its iShares competitor.