By Russell Wild

Whatever your total allocation to domestic small cap stocks, anywhere from 60 to 75 percent of that amount should be allocated to small value. But no more than that, please. If the value premium disappears or becomes a value discount, you don’t want to be left holding the bag.

And even if small value continues to outperform, having both small value and small growth (along with their bigger cousins, all of which tend to rise and fall in different cycles) will help smooth out some of the inevitable volatility of holding stocks.

The best choices among small value ETFs include offerings from Vanguard and iShares.

Vanguard Small Cap Value ETF (VBR)

Indexed to: MSCI U.S. Small Cap Value Index (about 1,000 small value domestic companies)

Expense ratio: 0.09 percent

Average cap size: $2.9 billion

P/E ratio: 16.6

Top five holdings: Snap-on Inc, Alaska Air, Gannett Co, Rite Aid, Arthur J Gallagher & Co

Russells review: Low cost, wide diversification, tax efficiency beyond compare, and a very definite value lean — what’s not to like? The Vanguard Small Cap Value ETF offers an excellent way to tap into this asset class. If you hold this fund at Vanguard, you get a bonus: You can trade with no commission.

iShares Morningstar Small Value Index (JKL)

Indexed to: Morningstar’s Small Value Index (about 230 companies of modest size and modest stock price)

Expense ratio: 0.30 percent

Average cap size: $2.5 billion

P/E ratio: 15.0

Top five holdings: Office Depot, Health Net Inc, Retail Properties of America, JetBlue Airways, Validus Holdings

Russells review: The Morningstar indexes tend to be a bit too concentrated, at least in the large cap arena where a company like Exxon Mobil can hold too much sway. In the Morningstar small cap indexes, that isn’t a problem. The largest holding here, Office Depot, gets only a 0.83 allocation, which is fine and dandy. The expense ratio, too, is acceptable although higher than some others in this category. Morningstar promises no crossover between growth and value. If you own this ETF along with the iShares Morningstar Small Growth Index, you should get pleasantly modest correlation. (In lay terms, if one fund gets slammed, the other may not.)

iShares S&P Small Cap 600 Value Index (IJS)

Indexed to: 457 of the S&P SmallCap 600 Value Index

Expense ratio: 0.25 percent

Average cap size: $1.3 billion

P/E ratio: 19.7

Top five holdings: Casey’s General Stores, Stifel Financial Corp, Darling Ingredients Inc, Southwest Gas Corp, EMCOR Group, Inc.

Russells review: S&P indexes are a bit too subjective. Nonetheless, this fund’s price is reasonable, and there’s no reason to entirely snub this iShares offering. (You may later decide that you’ll do better elsewhere.) Oh, this fund also trades commission-free on the Fidelity platform.

Guggenheim S&P 600 Small Cap Pure Value (RZV)

Indexed to: S&P SmallCap Pure Value Index (approximately 150 of the most valuey and small of the S&P 600 companies)

Expense ratio: 0.35

Average cap size: $736 million

P/E ratio: 16.3

Top five holdings: Meadowbrook Insurance Group, Universal Corp, TTM Technologies, SkyWest Inc, Cash America International Inc.

Russells review: The price is higher than others in this category, and the promise of “purity” is a bit murky, especially if that quest for purity leads to high turnover, which blows much of the tax efficiency. Guggenheim also seems to cater mostly to traders rather than buy-and-hold investors, which gives me something of a feeling of discomfort. Traders usually trade themselves into hamburger-eating misery. In addition, although the low P/E ratio is tantalizing, the smaller-than-small cap size is concerning. When cap size gets too small (and small caps start looking like micro caps), liquidity becomes an issue, and index funds can sometimes get hurt.