VictoryShares US 500 Enhanced Volatility Wtd ETF (CFO)

Overview

The VictoryShares US 500 Enhanced Volatility Wtd ETF (SPVU) seeks to provide investment results that closely correspond, before fees and expenses, to the performance of the Nasdaq Victory US 500 Enhanced Volatility Index. It focuses on large-cap US equities, weighting them based on volatility to potentially enhance risk-adjusted returns.

Reputation and Reliability

Victory Capital Management is a well-established asset manager with a growing reputation for innovative ETF offerings.

Management Expertise

Victory Capital has a dedicated ETF team with experience in quantitative investment strategies and risk management.

Goal

To track the Nasdaq Victory US 500 Enhanced Volatility Index and provide capital appreciation.

Investment Approach and Strategy

Strategy: The ETF tracks an index designed to overweight the least volatile stocks within the S&P 500, aiming for lower volatility and potentially higher risk-adjusted returns.

Composition Primarily large-cap US equities selected from the S&P 500 index, weighted by volatility.

Market Share: SPVU holds a small but growing market share within the smart beta ETF space.

Total Net Assets (AUM): 388704069

Key Competitors

• Invesco S&P 500 Low Volatility ETF (SPLV)
• iShares MSCI USA Minimum Volatility Factor ETF (USMV)
• AGF US Market Neutral Anti-Beta ETF (BTAL)

Competitive Landscape

The low volatility ETF space is competitive with several established players. SPVU differentiates itself through its specific index methodology, which focuses on enhancing volatility weighting. Compared to competitors, SPVU may offer slightly different sector exposures and risk profiles, leading to varying performance outcomes. SPVU is a smaller player in this space and this could make it less liquid than the leaders, SPLV and USMV.

Historical Performance: Historical performance data should be sourced from financial data providers. The ETF has shown competitive performance relative to its benchmark since inception.

Benchmark Comparison: Performance should be compared to the Nasdaq Victory US 500 Enhanced Volatility Index. It should be noted that Enhanced Volatility still has volatility.

Expense Ratio: 0.29

Average Trading Volume

The ETF's average daily trading volume can vary, but is generally moderate, so investors should be mindful of potential slippage.

Bid-Ask Spread

The bid-ask spread is usually tight, indicating reasonable liquidity, but it can widen during periods of market volatility.

Market Environment Factors

Economic conditions, interest rates, and overall market volatility all influence the performance of SPVU.

Growth Trajectory

Growth depends on investor demand for low volatility strategies and the ETF's ability to effectively track its index, no changes to strategy and holdings are available.

Competitive Edge

SPVU's competitive advantage lies in its specific volatility-weighted index methodology, which may provide superior risk-adjusted returns compared to other low volatility ETFs. VictorySharesu2019 management team has experience in quantitative investment strategies. The ETF's targeted approach to volatility weighting may appeal to investors seeking a refined approach to downside protection. However, it should be noted that enhanced volatility still has volatility compared to straight low volatility ETF competitors.

Volatility

SPVU is designed to have lower volatility than the S&P 500, but it is still subject to market fluctuations.

Market Risk

Market risk is the primary risk, as the ETF invests in equities and is subject to overall market movements, sector-specific risks, and company-specific risks.

Ideal Investor Profile

SPVU is suitable for investors seeking lower volatility exposure to the US large-cap market with the potential for enhanced risk-adjusted returns. It is a good fit for risk-averse investors who still want equity market exposure.

Market Risk

This ETF is suited for long-term investors and passive index followers seeking downside protection in their portfolio.

The VictoryShares US 500 Enhanced Volatility Wtd ETF (SPVU) is a smart beta ETF that weights S&P 500 stocks based on volatility, seeking to provide lower volatility and potentially higher risk-adjusted returns. The ETF is less liquid than key competitors. It is suitable for risk-averse investors seeking to minimize downside risk within their large-cap equity allocation. While it aims for lower volatility, investors should understand it still has market risk and is not risk free.

Data Sources:

• Victory Capital Management Website
• ETF.com
• Morningstar
• Bloomberg

Disclaimers:

The information provided is for informational purposes only and does not constitute financial advice. Investors should conduct their own research and consult with a qualified financial advisor before making any investment decisions. Market data is subject to change.