MSSM vs. VB

Last updated Jun 4, 2026

MSSM (Morgan Stanley Pathway Small-Mid Cap Equity ETF) and VB (Vanguard Small-Cap ETF) are both Small Cap Blend Equities funds. MSSM is actively managed, while VB is passively managed. Over the past year, MSSM returned 35.45% vs 28.82% for VB. With a 0.98 correlation, they move nearly in lockstep. MSSM charges 0.62%/yr vs 0.05%/yr for VB.

Performance

MSSM vs. VB - Performance Comparison

The chart below illustrates the hypothetical performance of a $10,000 investment in Morgan Stanley Pathway Small-Mid Cap Equity ETF (MSSM) and Vanguard Small-Cap ETF (VB). The values are adjusted to include any dividend payments, if applicable.

Returns By Period

In the year-to-date period, MSSM achieves a 17.34% return, which is significantly higher than VB's 14.16% return.

MSSM

• 1D: -0.79%
• 1M: 3.77%
• YTD: 17.34%
• 6M: 17.18%
• 1Y: 35.45%
• 3Y*: —
• 5Y*: —
• 10Y*: —

VB

• 1D: -0.65%
• 1M: 3.52%
• YTD: 14.16%
• 6M: 14.12%
• 1Y: 28.82%
• 3Y*: 17.05%
• 5Y*: 7.11%
• 10Y*: 11.30%

*Multi-year figures are annualized to reflect compound growth (CAGR)

MSSM vs. VB - Yearly Performance Comparison

	2026 (YTD)	2025	2024
MSSM Morgan Stanley Pathway Small-Mid Cap Equity ETF	17.34%	11.33%	-5.83%
VB Vanguard Small-Cap ETF	14.16%	8.87%	-6.04%

Correlation

The correlation between MSSM and VB is 0.98 - these two move nearly in lockstep. At this level, holding both provides almost no diversification benefit. If you already own one, adding the other does little to reduce portfolio risk.

	Correlation
Correlation (1Y) Calculated over the trailing 1-year period	0.98
Correlation (All Time) Calculated using the full available price history since Dec 10, 2024	0.98

The correlation between MSSM and VB has been stable across timeframes, ranging from 0.98 to 0.98 - a consistent structural relationship.

Return for Risk

MSSM vs. VB — Risk / Return Rank

Compare risk-adjusted metric ranks to identify better-performing investments over the past 12 months.

MSSM

MSSM Risk / Return Rank: 67
MSSM Sharpe Ratio Rank: 63
MSSM Sortino Ratio Rank: 63
MSSM Omega Ratio Rank: 58
MSSM Calmar Ratio Rank: 75
MSSM Martin Ratio Rank: 76

VB

VB Risk / Return Rank: 56
VB Sharpe Ratio Rank: 51
VB Sortino Ratio Rank: 51
VB Omega Ratio Rank: 48
VB Calmar Ratio Rank: 64
VB Martin Ratio Rank: 64

The rank (0–100) shows how this investment's returns compare to the risk taken. Higher = better. Based on the past 12 months of data, combining Sharpe, Sortino, and other metrics used by quantitative funds and institutional investors.

MSSM vs. VB - Risk-Adjusted Trends Comparison

This table presents a comparison of risk-adjusted performance metrics for Morgan Stanley Pathway Small-Mid Cap Equity ETF (MSSM) and Vanguard Small-Cap ETF (VB). Risk-adjusted metrics are performance indicators that assess an investment's returns in relation to its risk, enabling a more accurate comparison of different investment options.

	MSSM	VB	Difference
Sharpe ratio: Return per unit of total volatility	2.07	1.78	+0.29
Sortino ratio: Return per unit of downside risk	2.90	2.56	+0.35
Omega ratio: Gain probability vs. loss probability	1.35	1.31	+0.04
Calmar ratio: Return relative to maximum drawdown	3.75	3.22	+0.52
Martin ratio: Return relative to average drawdown	14.47	11.87	+2.60
Data is calculated on a 1-year rolling basis and updated daily. The trend shows the change in the indicator over the past month.

MSSM vs. VB - Sharpe Ratio Comparison

The current MSSM Sharpe Ratio is 2.07, which is comparable to the VB Sharpe Ratio of 1.78. The chart below compares the historical Sharpe Ratios of MSSM and VB, calculated using daily returns over the previous 12 months. A higher Sharpe Ratio indicates better risk-adjusted performance relative to the risk-free rate.

Sharpe Ratios by Period

	MSSM	VB	Difference
Sharpe Ratio (1Y) Calculated over the trailing 1-year period	2.07	1.78	+0.29
Sharpe Ratio (5Y) Calculated over the trailing 5-year period	—	0.34	—
Sharpe Ratio (10Y) Calculated over the trailing 10-year period	—	0.53	—
Sharpe Ratio (All Time) Calculated using the full available price history	0.73	0.44	+0.29

Drawdowns

MSSM vs. VB - Drawdown Comparison

The maximum MSSM drawdown since its inception was -24.18%, smaller than the maximum VB drawdown of -59.56%. Use the drawdown chart below to compare losses from any high point for MSSM and VB.

Drawdown Indicators

	MSSM	VB	Difference
Max Drawdown Largest peak-to-trough decline	-24.18%	-59.56%	+35.38%
Max Drawdown (1Y) Largest decline over 1 year	-9.50%	-8.98%	-0.52%
Max Drawdown (3Y) Largest decline over 3 years	—	-25.36%	—
Max Drawdown (5Y) Largest decline over 5 years	—	-28.15%	—
Max Drawdown (10Y) Largest decline over 10 years	—	-42.05%	—
Current Drawdown Current decline from peak	-0.79%	-0.65%	-0.14%
Average Drawdown Average peak-to-trough decline	-4.67%	-8.44%	+3.77%
Ulcer Index Depth and duration of drawdowns from previous peaks	2.46%	2.43%	+0.03%

Volatility

MSSM vs. VB - Volatility Comparison

Morgan Stanley Pathway Small-Mid Cap Equity ETF (MSSM) has a higher volatility of 5.05% compared to Vanguard Small-Cap ETF (VB) at 4.42%. This indicates that MSSM's price experiences larger fluctuations and is considered to be riskier than VB based on this measure. The chart below showcases a comparison of their rolling one-month volatility.

Volatility by Period

	MSSM	VB	Difference
Volatility (1M) Calculated over the trailing 1-month period	5.05%	4.42%	+0.63%
Volatility (6M) Calculated over the trailing 6-month period	12.76%	11.72%	+1.04%
Volatility (1Y) Calculated over the trailing 1-year period	17.27%	16.28%	+0.99%
Volatility (5Y) Calculated over the trailing 5-year period, annualized	20.91%	20.74%	+0.17%
Volatility (10Y) Calculated over the trailing 10-year period, annualized	20.91%	21.42%	-0.51%

MSSM vs. VB - Expense Ratio Comparison

MSSM has a 0.62% expense ratio, which is higher than VB's 0.05% expense ratio.

Dividends

MSSM vs. VB - Dividend Comparison

MSSM's dividend yield for the trailing twelve months is around 2.69%, more than VB's 1.19% yield.

Position	TTM	2025	2024	2023	2022	2021	2020	2019	2018	2017	2016	2015
MSSM Morgan Stanley Pathway Small-Mid Cap Equity ETF	2.69%	3.15%	0.00%	0.00%	0.00%	0.00%	0.00%	0.00%	0.00%	0.00%	0.00%	0.00%
VB Vanguard Small-Cap ETF	1.19%	1.33%	1.30%	1.55%	1.59%	1.24%	1.14%	1.39%	1.67%	1.35%	1.50%	1.48%

Frequently Asked Questions

Can I hold both MSSM and VB in my portfolio?

With a correlation of 0.98, MSSM and VB move almost identically. Holding both adds very little diversification - you're essentially doubling your position in the same market segment. Choosing one is usually more capital-efficient.

Which is riskier, MSSM or VB?

MSSM has higher volatility (5.05%) compared to VB (4.42%). In terms of maximum drawdown, MSSM dropped -24.18% vs VB's -59.56%.

Which ETF is better, MSSM or VB?

On 1-year performance, MSSM leads with 35.45% vs 28.82% for VB. On fees, VB is cheaper at 0.05% per year. On volatility, VB has been the lower-risk option at 4.42%. The better choice depends on whether you care most about return, fees, risk, or income.

Which ETF has performed better, MSSM or VB?

Over the 1-year period, MSSM has performed better with a 35.45% return vs 28.82%. Past performance does not guarantee future results, so compare this with risk, fees, and fund exposure.

Which ETF is cheaper, MSSM or VB?

VB is cheaper with a 0.05% expense ratio, compared with 0.62% for MSSM.

Which ETF pays a higher dividend yield, MSSM or VB?

MSSM has the higher dividend yield at 2.69%, compared with 1.19% for VB.

What is the main difference between MSSM and VB?

They also come from different issuers: Morgan Stanley and Vanguard. Their fees differ too: 0.62% for MSSM and 0.05% for VB.

Which has better risk-adjusted returns?

MSSM currently has the higher Sharpe Ratio (2.07 vs 1.78), meaning it's delivered slightly more return per unit of risk over the trailing 12 months. However, this ranking shifts over time - use the Risk/Return Score above for a more comprehensive view that combines Sharpe, Sortino, and other measures used by quantitative funds.