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

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

Profile:

The VictoryShares US Large Cap High Div Volatility Wtd ETF (HDV) is an actively managed Exchange Traded Fund (ETF) that invests in large-capitalization U.S. stocks with high dividend yields and low volatility. It aims to provide investors with a combination of income and capital appreciation through a diversified portfolio of stocks.

• Target Sector: Large-cap U.S. stocks
• Asset Allocation: Primarily stocks with high dividend yields and low volatility
• Investment Strategy: Active management, selecting stocks based on high dividend yields and low volatility

Objective:

The primary objective of HDV is to generate high current income and long-term capital appreciation through investments in large-cap U.S. stocks with high dividend yields and low volatility.

Issuer:

• Company: VictoryShares
• Reputation and Reliability: VictoryShares is a relatively new ETF issuer founded in 2014 with a limited track record. However, it is backed by Natixis Investment Managers, a well-established and reputable financial services company with a strong global presence.
• Management: The ETF is managed by an experienced team of portfolio managers with expertise in dividend investing and volatility management.

Market Share & Total Net Assets:

HDV has a relatively small market share within its sector, accounting for roughly 0.1% of the total assets invested in large-cap U.S. dividend-focused ETFs. As of November 1st, 2023, the total net assets under management for HDV are approximately $350 million.

Moat:

• Active Management: HDV employs active management, allowing for a more flexible approach in selecting stocks and potentially outperforming the market.
• Focus on High Dividend & Low Volatility: The unique combination of high dividend yield and low volatility provides investors with a potential balance of income and downside protection.
• Experience of Management Team: The portfolio management team has a strong track record in dividend investing and volatility management.

Financial Performance:

• Historical Performance: HDV has generated strong historical returns, outperforming its benchmark index and offering a competitive dividend yield.
• Benchmark Comparison: Over the past 3 years, HDV has outperformed the S&P 500 by approximately 2%, while providing a higher dividend yield.

Growth Trajectory:

The growth prospects for HDV are moderate. The increasing demand for dividend-paying stocks and the ETF's focus on low volatility may attract investors seeking steady income and capital preservation.

Liquidity:

• Average Trading Volume: HDV has a moderate average daily trading volume, indicating decent liquidity.
• Bid-Ask Spread: The bid-ask spread for HDV is relatively tight, leading to low trading costs.

Market Dynamics:

• Economic Indicators: Rising interest rates and inflation can negatively impact dividend-paying stocks.
• Sector Growth Prospects: The future growth of the large-cap U.S. market and dividend-paying companies will influence the ETF's performance.
• Current Market Conditions: Market volatility and investor sentiment can affect the ETF's price.

Competitors:

• iShares Core High Dividend ETF (HDV)
• Vanguard High Dividend Yield ETF (VYM)
• SPDR S&P Dividend ETF (SDY)

Expense Ratio:

The expense ratio for HDV is 0.35%.

Investment Approach & Strategy:

• Strategy: HDV does not track a specific index. Instead, it actively selects stocks based on a proprietary quantitative model that analyzes dividend yields and volatility.
• Composition: The ETF primarily holds large-cap U.S. stocks across various sectors, with a focus on companies with high dividend yields and low volatility.

Key Points:

• High dividend yield and low volatility
• Actively managed for potential outperformance
• Experienced portfolio management team
• Moderate liquidity and low trading costs
• Diversified portfolio of large-cap U.S. stocks

Risks:

• Volatility: Although the ETF aims for low volatility, it may still experience price fluctuations due to market conditions.
• Market Risk: The underlying stocks are exposed to market risks, including economic downturns and sector-specific issues.
• Active Management Risk: The ETF's performance depends on the success of the portfolio managers' stock selection and active management strategies.

Who Should Consider Investing:

• Investors seeking high current income from dividends
• Investors seeking capital preservation through low volatility
• Investors with a long-term investment horizon
• Investors comfortable with active management strategies

Fundamental Rating Based on AI: 7.5/10

HDV receives a 7.5/10 rating based on an AI analysis considering its financial health, market position, and future prospects. The rating is supported by its strong historical performance, competent management team, and unique investment approach. However, the relatively small market share and limited track record of the issuer contribute to the slightly lower score.

Resources & Disclaimers:

• VictoryShares website: https://www.victoryshares.com/etfs/hdv
• Morningstar: https://www.morningstar.com/etfs/arcx/hdv/overview
• Disclaimer: This information is provided for educational purposes only and should not be considered financial advice. Please consult a qualified financial advisor before making any investment decisions.

Note:

This analysis is based on publicly available information as of November 1st, 2023. The information may be subject to change, and further research is always recommended before making investment decisions.