VBR tracks the CRSP US Small Cap Value Index, which selects small US companies with lower price-to-book, price-to-earnings and similar valuation measures. The fund holds more financials, industrials, real estate and consumer companies and less technology than small-cap growth funds. The academic size and value premiums have been documented over long periods, but small-cap value has also had long stretches of underperformance. Small caps are more sensitive to credit conditions and the domestic economy than large caps.
