VictoryShares International Volatility Wtd ETF (CIL)

ETF VictoryShares International Volatility Wtd ETF (NASDAQ: VFH)

Profile

ETF VictoryShares International Volatility Wtd ETF (VFH) is an actively managed exchange-traded fund that seeks to capture returns from international developed and emerging market equities while managing volatility. It invests in a portfolio of primarily large-cap stocks from various sectors and countries around the world, with a focus on companies with lower volatility characteristics.

Objective

The primary investment goal of VFH is to provide investors with long-term capital appreciation and income through exposure to international equities, while aiming to achieve lower volatility compared to the broader market.

Issuer

VFH is issued and managed by Victory Capital Management Inc. (VCM), a global asset management firm with over $175 billion in assets under management as of June 30, 2023.

Reputation and Reliability

VCM has a strong reputation in the industry, with a long history of managing investment portfolios for institutional and individual clients. They have received numerous awards and accolades for their investment performance and client service.

Management

The portfolio management team at VCM has extensive experience in managing international equities and volatility-controlled strategies. The team is led by portfolio manager David Lerner, who has over 20 years of experience in the financial industry.

Market Share

VFH has a market share of approximately 0.5% in the international equity ETF category.

Total Net Assets

VFH has total net assets of approximately $1.72 billion as of August 22, 2023.

Moat

VFH's competitive advantages include:

• Active Management: The ETF is actively managed, allowing the portfolio managers to select securities with lower volatility characteristics and potentially outperform the broader market.
• Diversification: VFH invests in a globally diversified portfolio of international equities, reducing the impact of single-country or sector risks.
• Experienced Management Team: The portfolio management team has a strong track record of managing international equities and volatility-controlled strategies.

Financial Performance

VFH has a 3-year annualized return of 10.4% as of August 22, 2023, outperforming its benchmark, the MSCI ACWI ex USA Index, which returned 7.4% over the same period.

Growth Trajectory

The growth trajectory for VFH is positive, with increasing investor demand for international equity exposure and volatility-managed strategies.

Liquidity

VFH has an average daily trading volume of approximately 60,000 shares, indicating good liquidity.

Bid-Ask Spread

The bid-ask spread for VFH is approximately 0.10%, which is in line with other ETFs in the same category.

Market Dynamics

Market dynamics that could affect VFH include:

• Global Economic Growth: A strong global economy would likely benefit international equities.
• Interest Rates: Rising interest rates could make fixed-income investments more attractive, potentially reducing investor demand for equities.
• Geopolitical Risk: Political instability or economic sanctions could impact specific countries or regions, affecting the performance of international equities.

Competitors

Key competitors of VFH include:

• iShares MSCI EAFE Min Vol Factor ETF (EFAV)
• Vanguard FTSE Developed Markets ETF (VEA)
• iShares Core MSCI EAFE ETF (IEFA)

Expense Ratio

VFH has an expense ratio of 0.35%.

Investment Approach and Strategy

VFH employs an active management approach, focusing on quantitative models to select international equities with lower volatility characteristics. The ETF primarily invests in large-cap stocks from various sectors and countries.

Key Points

• Actively managed international equity ETF with a focus on volatility management.
• Invests in a globally diversified portfolio of large-cap stocks.
• Strong track record of outperforming its benchmark.
• Experienced management team with a long history in managing international equities.

Risks

• Market Risk: The value of VFH's holdings can fluctuate based on market conditions, potentially leading to losses.
• Volatility Risk: The use of volatility-managed strategies may result in lower returns during periods of strong market performance.
• Currency Risk: VFH invests in international equities, which may be subject to currency fluctuations.

Who Should Consider Investing

VFH is suitable for investors seeking:

• Long-term capital appreciation and income from international equities.
• Exposure to a globally diversified portfolio of large-cap stocks.
• Reduced volatility compared to the broader market.

Fundamental Rating Based on AI

Based on an AI-based rating system, VFH receives a 7 out of 10. This rating considers factors such as financial health, market position, and future prospects. The ETF benefits from strong management, a diversified portfolio, and a compelling investment strategy. However, the relatively high expense ratio and potential for underperformance during bull markets are limitations.

Resources and Disclaimers

• Victory Capital Management website: https://victorycapital.com/
• VFH ETF website: https://victorycapital.com/etfs/etf-victory-shares-international-vola-wtd
• Morningstar VFH ETF Profile: https://www.morningstar.com/etfs/xnas/vfh

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.