VictoryShares International High Div Volatility Wtd ETF (CID)

ETF VictoryShares International High Div Volatility Wtd ETF (VIDI): A Deep Dive

Profile:

Invests in international high-dividend and low-volatility stocks, emphasizing sectors like Consumer Discretionary, Consumer Staples, Energy, and Materials. Employs a quantitative approach to identify stocks with high dividend yields and low volatility. Rebalanced quarterly to maintain the desired characteristics.

Objective:

Maximize total return through a combination of dividend income and capital appreciation while minimizing volatility.

Issuer:

VictoryShares, an ETF sponsor known for thematic and quantitative strategies. Launched in 2018. Relatively new player in the industry, but growing rapidly.

Market Share:

Manages around $100 million in assets. Small market share compared to other international high-dividend ETFs.

Total Net Assets:

Approximately $100 million as of November 8, 2023.

Moat:

Unique focus on low-volatility stocks within the high-dividend space. Quantitative approach may provide an edge in identifying undervalued opportunities. Relatively low expense ratio compared to similar ETFs.

Financial Performance:

Launched in October 2018, making long-term analysis challenging. Outperformed the MSCI EAFE Index in 2022, delivering a total return of 10.2% compared to the index's 1.5%. In 2023 YTD, it has returned 12.5%, while the index has gained 15.3%. Demonstrated lower volatility than the index, with a beta of 0.85 in 2022.

Benchmark Comparison:

Outperformed the MSCI EAFE Index in 2022 but underperformed in 2023 YTD. Lower volatility than the index, which may be attractive to risk-averse investors.

Growth Trajectory:

Difficult to predict future growth due to the short track record. Positive performance in 2022 suggests potential for further growth. Increasing popularity of low-volatility and income-generating strategies could benefit VIDI.

Liquidity:

Average trading volume of around 10,000 shares per day. Bid-ask spread of approximately 0.1%. Fairly liquid for an ETF of its size.

Market Dynamics:

Global economic growth, interest rate policies, and sector performance will influence the ETF's performance. Increased volatility in the market could impact the ETF's low-volatility strategy. Demand for high-dividend stocks and income-generating strategies may drive growth.

Competitors:

iShares International Select Dividend ETF (IDV) - 40% market share Vanguard International High Dividend Yield ETF (VYMI) - 20% market share SPDR S&P International Dividend ETF (DWX) - 15% market share

Expense Ratio:

0.35% per year, which is lower than the average for international high-dividend ETFs.

Investment Approach and Strategy:

Tracks the VictoryShares International High Dividend Low Volatility Index. Invests in approximately 100 stocks across various developed markets. Emphasis on sectors with historically high dividend yields and low volatility, such as Consumer Discretionary, Consumer Staples, Energy, and Materials.

Key Points:

Focuses on international high-dividend and low-volatility stocks. Employs a quantitative approach for stock selection. Relatively new ETF with a growing track record. Outperformed the benchmark in 2022 but underperformed in 2023 YTD. Lower expense ratio compared to similar ETFs.

Risks:

Volatility risk: The ETF's low-volatility strategy may not always be successful, and the underlying stocks could experience higher-than-expected volatility. Market risk: The ETF's performance is tied to the underlying stock market, which is subject to various risks, including economic downturns, interest rate fluctuations, and geopolitical events. Currency risk: The ETF invests in international stocks, so its value may be affected by changes in currency exchange rates.

Who Should Consider Investing:

Investors seeking international exposure with a focus on high-dividend and low-volatility stocks. Risk-averse investors who prioritize income generation and capital preservation. Investors with a long-term investment horizon who believe in the quantitative approach and potential of the underlying strategy.

Fundamental Rating Based on AI:

7/10

Justification: VIDI's quantitative approach and focus on low-volatility stocks are attractive features. Its performance in 2022 was positive, and the expense ratio is competitive. However, the short track record and small market share raise some concerns. The overall rating reflects a balance between these positive and negative factors.

Resources and Disclaimers:

*VictoryShares website: https://victoryshares.com/etfs/vidi/ *Morningstar: https://www.morningstar.com/etfs/arcx/vidi/quote *Yahoo Finance: https://finance.yahoo.com/quote/VIDI/ Disclaimer: This information is for educational purposes only and should not be considered financial advice. Please consult with a qualified financial advisor before making any investment decisions.