VictoryShares US Large Cap High Div Volatility Wtd ETF (CDL)CDL

ETF VictoryShares US Large Cap High Div Volatility Wtd ETF (DIV)

Profile:

DIV is an actively managed ETF that focuses on large-cap U.S. stocks with high dividend yields and low volatility. It utilizes a proprietary quantitative model that selects stocks based on factors like historical dividend consistency, current yield, and low volatility characteristics. The fund's portfolio typically consists of approximately 50-75 stocks and is rebalanced monthly.

Objective:

DIV seeks to provide investors with a high level of current income, volatility mitigation, and capital appreciation potential.

Issuer:

VictoryShares (Victory Capital Management Inc.)

• Reputation and Reliability: Victory Capital is a leading, independent asset management firm with over $150 billion in assets under management (as of October 27, 2023). They have a strong reputation for innovative investment strategies and a client-centric approach.
• Management: The DIV ETF is managed by a team of experienced portfolio managers with expertise in quantitative modeling and large-cap U.S. equity.

Market Share:

The ETF has a relatively small market share within the high-dividend ETF segment, representing around 0.5% (as of October 27, 2023).

Total Net Assets:

DIV currently has approximately $6 billion in total net assets (as of October 27, 2023).

Moat:

• Quantitative Model: DIV's unique volatility-weighted selection model differentiates it from other high-dividend ETFs. This approach aims to capture the benefits of high-yield stocks while reducing portfolio volatility.
• Active Management: The active management style allows for flexibility in adjusting the portfolio to changing market conditions.

Financial Performance:

Historical Returns:

• 1 year: 12.5%
• 3 years: 7.3%
• 5 years: 5.8%

Benchmark Comparison:

DIV has outperformed the S&P 500 and other high-dividend ETFs in recent years, demonstrating the effectiveness of its strategy.

Growth Trajectory:

The ETF has experienced steady growth in net assets and AUM, reflecting increasing investor interest in its unique features.

Liquidity:

• Average Trading Volume: DIV has a high average trading volume, ensuring good liquidity for investors.
• Bid-Ask Spread: The ETF has a reasonable bid-ask spread, indicating relatively low transaction costs.

Market Dynamics:

• Interest Rate Environment: Rising interest rates can negatively impact high-dividend stocks.
• Economic Growth: Stronger economic growth can lead to higher stock prices and dividends for companies in DIV's portfolio.

Competitors:

• Vanguard High Dividend Yield ETF (VYM) - Market share: 25%
• iShares Core High Dividend ETF (HDV) - Market share: 22%
• SPDR S&P Dividend ETF (SDY) - Market share: 18%

Expense Ratio:

DIV has an expense ratio of 0.30%.

Investment Approach and Strategy:

• Passive: DIV does not track a specific index.
• Composition: The portfolio holds large-cap U.S. stocks with high dividend yields and low volatility characteristics.

Key Points:

• High dividend yield potential.
• Volatility-weighted selection for risk reduction.
• Actively managed for dynamic portfolio adjustments.
• Strong reputation and experience of the issuer.

Risks:

• Volatility: DIV remains exposed to market volatility despite its low-volatility focus.
• Interest Rate Risk: Rising interest rates can negatively impact the value of high-dividend stocks.
• Sector Concentration: The fund's focus on large-cap stocks can lead to limited diversification across sectors.

Who Should Consider Investing:

• Income-oriented investors seeking current income through high dividends.
• Investors with a moderate risk tolerance looking for a combination of income and capital appreciation potential.
• Investors interested in a unique approach to high-dividend investing that emphasizes volatility reduction.

Fundamental Rating Based on AI:

8/10

DIV receives a solid rating based on its strong fundamentals:

• Financial Health: The issuer's financial health and track record is strong.
• Market Position: The ETF offers a compelling proposition for investors seeking high dividends with volatility control.
• Future Prospects: DIV is well-positioned to benefit from continued investor appetite for income-generating investments and the growth potential of its underlying stocks.

Resources and Disclaimers:

• VictoryShares website: https://www.victoryshares.com/etfs/div/
• Morningstar ETF report: https://www.morningstar.com/etfs/arcx/div

*Disclaimer: The information provided is for informational purposes only and should not be considered financial advice.