PRSVX vs VISVX (2026): T. Rowe Price Small-Cap Value vs Vanguard Small-Cap Value Index
PRSVX (T. Rowe Price Small-Cap Value Fund) is an actively managed small-cap value fund that relies on deep fundamental research to find undervalued small companies — and it's been on a tear, returning 24.84% over the past year. But it charges 0.80% and has lagged over 5 years. VISVX (Vanguard Small-Cap Value Index Fund) takes the passive approach at 0.20%, tracking a broad small-cap value index. The question: in the one corner of the market where active management has a genuine theoretical edge, does T. Rowe Price actually deliver?
By Dan Mahler · Updated July 30, 2026
💡 Bottom Line Up Front
PRSVX is having a standout year — 24.84% vs VISVX's 19.86%, a nearly 5-point active advantage that more than justifies its higher fee. The 3-year returns are essentially tied (15.72% vs 15.64%), which is notable because PRSVX's 0.60% annual fee drag means its gross stock picks are actually beating the index by a meaningful margin. But zoom out to 5 years and VISVX leads decisively (9.25% vs 6.56%) — suggesting PRSVX's stock selection can be inconsistent. The core tension: small-cap value is genuinely where active managers have the best shot at beating an index, because analyst coverage is thin and market inefficiency is real. But 4× the cost is a steep hurdle to clear consistently. For cost-conscious long-term investors: VISVX. For investors who believe T. Rowe Price's research edge in small caps is real and are willing to pay for it: PRSVX has the recent results to back the case.
PRSVX vs VISVX: At a Glance
| Metric | PRSVX | VISVX |
|---|---|---|
| Fund Name | T. Rowe Price Small-Cap Value | Vanguard Small-Cap Value Index Investor |
| Fund Family | T. Rowe Price | Vanguard |
| Category | Small Value (Active) | Small Value (Passive/Index) |
| Expense Ratio | 0.80% | 0.20% ✓ |
| 1-Year Return | 24.84% ✓ | 19.86% |
| 3-Year Return (ann.) | 15.72% ✓ | 15.64% |
| 5-Year Return (ann.) | 6.56% | 9.25% ✓ |
| 10-Year Return (ann.) | N/A | 10.32% ✓ |
| Distribution Yield | 0.65% | 1.66% ✓ |
| AUM | $10.6B | $67.8B ✓ |
| Minimum Investment | $2,500 ✓ | $3,000 |
| Morningstar Rating | N/A | ★★★★ |
| Management Style | Active (fundamental value) | Passive (CRSP index) |
Data as of July 2026. Returns are annualized for periods greater than 1 year.
The Core Difference: Active Stock Picking vs Index Replication in Small-Cap Value
This isn't your typical active-vs-passive debate. Small-cap value is the one corner of the market where the case for active management is genuinely strong — and academic research backs it up. Here's why: when you buy an S&P 500 index fund, you're owning stocks covered by dozens of analysts at every major bank. There's almost no informational edge to exploit. But in small-cap value? Many of these companies have one analyst or none. Their investor relations teams are bare-bones. Quarterly earnings calls might have five people on them.
PRSVX exploits this gap. T. Rowe Price deploys a large research team to evaluate companies with market caps as small as a few hundred million dollars — visiting factories, analyzing supply chains, meeting management teams that Wall Street ignores. The goal: find fundamentally sound small companies trading below intrinsic value because nobody's paying attention.
VISVX takes the opposite approach: buy the entire small-cap value universe mechanically. It tracks a broad index of hundreds of small-cap value stocks, weighted by market cap. No stock picking, no research teams, no judgment calls. The bet: even if active managers can find some mispriced stocks, the cost savings and diversification of indexing will win over time.
Why Small-Cap Value Is Different From Large-Cap
- Average analyst coverage per stock: ~1–2 for small-cap value vs 20+ for S&P 500 names
- Market efficiency is lower — prices diverge from fundamentals more often and for longer
- Index construction in small-cap value is messier — many "value traps" end up in the index mechanically
- Active managers can avoid distressed companies that screen as "cheap" but are actually dying businesses
- PRSVX's 1-year edge of ~5 percentage points suggests the active advantage is currently working
Performance: PRSVX Wins Short-Term, VISVX Wins Long-Term
The performance story here is split down the middle. PRSVX's 24.84% one-year return is exceptional — nearly 5 points ahead of VISVX. The 3-year returns are virtually identical (15.72% vs 15.64%), which actually favors PRSVX on a gross-of-fee basis since it's overcoming a 0.60% annual fee disadvantage. But the 5-year numbers tell a different story: VISVX's 9.25% trounces PRSVX's 6.56%. Active management in small-cap value can work — but it's streaky.
| Period | PRSVX | VISVX | Difference |
|---|---|---|---|
| 1-Year | 24.84% | 19.86% | +4.98% PRSVX |
| 3-Year (ann.) | 15.72% | 15.64% | +0.08% PRSVX |
| 5-Year (ann.) | 6.56% | 9.25% | +2.69% VISVX |
| 10-Year (ann.) | N/A | 10.32% | — |
The 3-year near-tie is deceptive — it actually favors PRSVX because the fund is generating roughly equal returns while paying 0.60% more in fees annually. That means T. Rowe Price's gross stock picks are beating the index by about 0.68% per year over 3 years. The 5-year gap, however, shows that active small-cap value management can have painful stretches. PRSVX likely suffered during the 2022 drawdown or made stock-specific bets that didn't recover as quickly as the broader index.
Cost Comparison: VISVX Costs 4× Less Per Year
VISVX charges 0.20% annually — competitive for a small-cap index fund. PRSVX charges 0.80% — reasonable for an actively managed small-cap fund, where the category average exceeds 1.00%. On a $100,000 portfolio, that's $200/year for VISVX versus $800/year for PRSVX — a $600 annual difference. Unlike large-cap where active fees are almost never justified, the expense ratio gap here is narrower and the active case is stronger.
| Portfolio Size | PRSVX Annual Cost (0.80%) | VISVX Annual Cost (0.20%) | Annual Savings with VISVX |
|---|---|---|---|
| $10,000 | $80 | $20 | $60 |
| $50,000 | $400 | $100 | $300 |
| $100,000 | $800 | $200 | $600 |
| $250,000 | $2,000 | $500 | $1,500 |
Context: 0.80% is actually below the category average for active small-cap funds, which often charge 1.00%–1.25%. T. Rowe Price is competitive on cost relative to peers. And the 0.60% gap between PRSVX and VISVX is smaller than you'd see in large-cap (where index funds can charge 0.015%). In small-cap, even index funds carry higher costs because of the trading complexity of smaller, less liquid stocks. The fee hurdle is real but not insurmountable — PRSVX's 1-year return clears it by nearly 5 percentage points.
Strategy & Holdings: What You're Actually Buying
PRSVX — T. Rowe Price Small-Cap Value
- Active: fundamental research on undervalued small companies
- Invests 80%+ in small-cap stocks believed to be trading below intrinsic value
- Concentrated approach: avoids "value traps" through bottom-up research
- T. Rowe Price's deep bench of small-cap analysts
- AUM of $10.6B — large enough for resources, small enough to be nimble
- Higher volatility (16.67%) — active bets add tracking error
- Lower yield (0.65%) — focused on capital appreciation over income
- Minimum investment: $2,500
VISVX — Vanguard Small-Cap Value Index
- Passive: tracks CRSP US Small Cap Value Index
- Broad diversification across hundreds of small-cap value stocks
- Market-cap weighted — owns all qualifying stocks mechanically
- No stock selection or active judgment — pure factor exposure
- Massive AUM ($67.8B) — highly liquid, tight spreads
- Lower volatility (14.99%) — broad diversification smooths returns
- Higher yield (1.66%) — small-cap value stocks tend to pay dividends
- Minimum investment: $3,000
The key structural difference: VISVX must own every stock that qualifies for its index — including companies that are cheap because they're genuinely deteriorating businesses ("value traps"). PRSVX can avoid these. A company trading at 8× earnings because its industry is dying looks like "value" to an index but looks like a trap to a skilled analyst. This is where T. Rowe Price's research team adds value — or at least tries to. The flip side: PRSVX's concentrated bets mean it can also be wrong, which explains the streakier performance pattern.
Risk Profile: Both Carry Small-Cap Volatility, but PRSVX Adds Active Risk
Small-cap value funds are inherently more volatile than large-cap funds. Both PRSVX and VISVX will experience larger drawdowns and sharper recoveries than an S&P 500 fund. PRSVX's 16.67% volatility is notably higher than VISVX's 14.99% — the difference comes from active stock selection adding "tracking error" on top of the market's natural movement.
| Risk Metric | PRSVX | VISVX |
|---|---|---|
| Volatility (std dev) | 16.67% | 14.99% ✓ |
| Tax Efficiency | N/A | 0.52 |
| Manager Risk | Moderate (team-based) | None (passive) ✓ |
| Concentration Risk | Higher (active stock bets) | Lower (hundreds of holdings) ✓ |
| Value Trap Exposure | Lower (actively screened) ✓ | Higher (index must hold all) |
PRSVX's higher volatility is the price you pay for active management — it can deviate from the index in both directions. When T. Rowe Price's picks are right (like the past year), the deviation is rewarded. When they're wrong (like parts of the 5-year period), it hurts. VISVX gives you the small-cap value factor with less idiosyncratic risk — you're capturing the systematic premium without betting on individual stock calls.
Which Fund Is Right for You?
Choose PRSVX if you:
- Believe active management adds real value in small-cap stocks
- Want a manager who can avoid value traps and dying businesses
- Trust T. Rowe Price's small-cap research team and track record
- Can tolerate higher volatility and periods of underperformance
- Are focused on capital appreciation over income/yield
- Have a long time horizon and won't panic during underperformance streaks
- Are allocating a smaller portion of your portfolio to small-cap value (where active risk is acceptable)
Choose VISVX if you:
- Want small-cap value exposure at the lowest possible cost
- Prefer systematic factor exposure without active management risk
- Want broad diversification across hundreds of small-cap value names
- Are building a Roth IRA or taxable portfolio where cost efficiency matters most
- Believe the small-cap value premium comes from the factor, not stock picking
- Want higher income — VISVX yields 1.66% vs PRSVX's 0.65%
- Prefer the consistency of index returns over the streakiness of active management
The Small-Cap Value Case for Active Management
In most asset classes, the default advice is to index. Small-cap value is the exception that deserves genuine consideration. The Fama-French research, AQR's factor studies, and decades of performance data show that analyst coverage in small-cap stocks is thin enough that skilled teams can find genuinely mispriced securities. PRSVX's 1-year outperformance and 3-year fee-adjusted parity suggest T. Rowe Price's team is currently exploiting this edge. The question is whether that edge persists — the 5-year numbers remind us it doesn't always. A reasonable middle ground: allocate to VISVX as your core small-cap value position, and consider PRSVX as a satellite if you have conviction in active small-cap management.
Verdict: VISVX for Most Investors; PRSVX If You Believe in Active Small-Cap
VISVX is the safer, cheaper, and more diversified choice. At 0.20%, it delivers pure small-cap value factor exposure — the 5-year return of 9.25% and 10-year return of 10.32% demonstrate the long-term power of this asset class. Vanguard's scale keeps costs low and execution tight. For investors who want systematic exposure to the small-cap value premium without active management risk, VISVX is the clear pick.
PRSVX deserves more credit than the 5-year number suggests. T. Rowe Price is one of the few fund families with the research infrastructure to genuinely add value in small caps — and the 24.84% one-year return isn't luck. The fund's ability to avoid value traps and identify underfollowed companies is a real edge in this market segment. The 3-year returns being essentially tied with VISVX, despite a 0.60% annual fee drag, means PRSVX's gross stock picks have been meaningfully outperforming the index.
The honest bottom line: if you're going to use active management anywhere in your portfolio, small-cap value is where the case is strongest. PRSVX is a credible vehicle for that view. But for the majority of investors building a long-term growth portfolio, VISVX's cost advantage and consistent factor exposure make it the more reliable path to capturing the small-cap value premium.
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Frequently Asked Questions
Is PRSVX or VISVX a better small-cap value fund?
It depends on your time horizon and philosophy. PRSVX has crushed VISVX over the past year (24.84% vs 19.86%), and its 3-year returns are essentially tied despite charging 4× more in fees — meaning its stock picks are genuinely outperforming the index on a gross basis. But VISVX leads over 5 years (9.25% vs 6.56%) and costs only 0.20%. Small-cap value is one of the few segments where active management has a credible case, but PRSVX's inconsistency over longer periods suggests the edge isn't guaranteed. VISVX is the safer default for most investors.
Why is small-cap value considered good for active management?
Small-cap value stocks receive far less analyst coverage than large caps — many have zero or one analyst. This creates information asymmetry that skilled research teams can exploit. Index funds in this space must mechanically hold hundreds of stocks, including "value traps" — companies that look cheap but are fundamentally deteriorating. Active managers like T. Rowe Price can avoid these. Academic research (Fama-French, AQR) has consistently found that the small-cap value premium is one of the most persistent factors in market history, and active management has a better track record of adding value here than in large-cap.
What is the expense ratio for PRSVX vs VISVX?
PRSVX charges 0.80% annually; VISVX charges 0.20%. On a $100,000 investment, that's $800/year versus $200/year — a $600 difference. PRSVX's 0.80% is actually below the category average for active small-cap funds (which often exceed 1.00%), and the gap with VISVX is smaller than you'd see in large-cap. But PRSVX still needs to generate at least 0.60% more in annual returns to justify the higher fee — a hurdle it's clearing on 1-year and 3-year horizons but not over 5 years.
Can I hold both PRSVX and VISVX?
You can, but the overlap would be significant since both target small-cap value stocks. A more effective strategy is to choose one for your small-cap value allocation and diversify across asset classes. If you want both active and passive in your portfolio, consider using VISVX for small-cap value and an active fund in a different segment — like a large-cap or international active fund — where the active manager offers genuinely different exposure.
Is small-cap value a good long-term investment?
Historically, small-cap value has been the highest-returning equity asset class over very long periods — the Fama-French research shows a persistent premium for both small size and value. VISVX's 10-year return of 10.32% demonstrates this premium in practice. However, small-cap value comes with higher volatility (both PRSVX at 16.67% and VISVX at 14.99% are above typical large-cap levels) and can underperform for extended stretches. It's best suited as a portfolio diversifier for long-term investors (10+ year horizons) who can tolerate drawdowns — not as a standalone core holding.
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