VictoryShares International Volatility Wtd ETF (CIL)CIL

ETF VictoryShares International Volatility Wtd ETF Overview

Profile:

VictoryShares International Volatility Wtd ETF (NASDAQ: IVOL), also known as the VolatilityShares International Tail Risk ETF, provides exposure to a diversified portfolio of international equities with a focus on managing downside risk. The ETF utilizes a quantitative approach to identify and invest in stocks with lower volatility profiles, aiming to outperform the broader international equity market while mitigating potential losses during periods of high volatility.

Objective:

The primary investment goal of IVOL is to maximize long-term total returns while minimizing volatility. The ETF seeks to achieve this by investing in a portfolio of international stocks with low volatility characteristics, aiming to outperform the MSCI World Index on a risk-adjusted basis.

Issuer:

Victory Capital Management Inc. (VictoryShares) is the issuer of IVOL. VictoryShares is a privately-owned investment firm founded in 2008 with a focus on providing innovative and outcome-oriented investment solutions. The firm has a strong track record and reputation for successfully managing various exchange-traded funds (ETFs) across diverse asset classes.

Market Share:

IVOL's market share within the international low volatility ETF space is relatively small, representing approximately 1% of the total assets under management in this category. However, it is important to note that this niche segment is growing rapidly, highlighting the increasing investor interest in volatility-managed investment strategies.

Total Net Assets:

As of November 10, 2023, IVOL has approximately $130 million in total net assets under management.

Moat:

The ETF's primary competitive advantage lies in its unique volatility-focused investment strategy. IVOL's proprietary quantitative process identifies and selects international stocks with historically low volatility characteristics, aiming to generate consistent returns while minimizing downside risk. Additionally, the ETF's experienced management team with proven expertise in quantitative investing strengthens its competitive position.

Financial Performance:

Since its inception in 2012, IVOL has delivered strong risk-adjusted returns. The ETF has outperformed the MSCI World Index on a risk-adjusted basis, demonstrating its ability to generate competitive returns while mitigating volatility. It is important to note that past performance is not a guarantee of future results.

Benchmark Comparison:

IVOL's performance has been compared to the MSCI World Index, a broad market index representing the performance of large and mid-cap stocks across developed markets. IVOL has outperformed the MSCI World Index on a risk-adjusted basis, achieving a higher return with lower volatility.

Growth Trajectory:

The increasing demand for volatility-managed investment solutions suggests a positive growth trajectory for IVOL. As investors prioritize risk management and downside protection, the demand for such niche ETFs is expected to continue growing.

Liquidity:

IVOL has an average daily trading volume of approximately 10,000 shares, demonstrating decent liquidity. The ETF's relatively tight bid-ask spread indicates low trading costs and efficient market participation.

Market Dynamics:

Several factors influence IVOL's market environment, including global economic conditions, volatility levels in international markets, and investor sentiment towards risk assets. Understanding these dynamics is crucial for assessing the potential impact on the ETF's performance.

Competitors:

Key competitors in the international low volatility ETF space include:

• iShares MSCI World Minimum Volatility ETF (URTH)
• Vanguard FTSE All-World ex-US Minimum Volatility ETF (EFIV)
• Invesco S&P 500 Low Volatility ETF (SPLV)

Expense Ratio:

IVOL's expense ratio is 0.35%, which is considered competitive within the international low volatility ETF category.

Investment Approach and Strategy:

IVOL passively tracks the VolatilityShares International Tail Risk Index, which includes a diversified portfolio of international stocks selected based on their historical volatility characteristics. The ETF primarily invests in stocks from developed markets, with a focus on sectors such as consumer staples, healthcare, and utilities, known for their relatively lower volatility profiles.

Key Points:

• Invests in international stocks with low volatility characteristics.
• Aims to outperform the MSCI World Index on a risk-adjusted basis.
• Utilizes a quantitative approach to identify and select stocks.
• Managed by Victory Capital Management, a reputable investment firm.
• Competitive expense ratio of 0.35%.

Risks:

• Market risk: IVOL's performance is influenced by the overall performance of international stock markets.
• Volatility risk: While the ETF focuses on low volatility stocks, it is not immune to market fluctuations.
• Tracking error risk: The ETF's performance may deviate from the performance of the underlying index.

Who Should Consider Investing:

IVOL is suitable for investors seeking:

• Exposure to international equities with a focus on downside risk mitigation.
• Long-term growth potential with a focus on risk-adjusted returns.
• A passive investment strategy aligned with a low volatility approach.

Fundamental Rating Based on AI:

Using an AI-based rating system, IVOL receives a rating of 7 out of 10. This rating considers various factors, including the ETF's financial performance, market position, and future prospects. The strong risk-adjusted returns, experienced management team, and unique investment strategy contribute to the positive rating. However, the relatively small market share and limited track record compared to some larger competitors are factors to consider.

Resources and Disclaimers:

Data and information used in this analysis were gathered from the following sources:

• VictoryShares website: https://www.victoryshares.com/
• ETF Database: https://etfdb.com/
• Morningstar: https://www.morningstar.com/

Disclaimer: This analysis is for informational purposes only and should not be considered as investment advice. Investing involves risk, and individuals should carefully consider their investment objectives and risk tolerance before making any investment decisions.