VictoryShares US Small Cap Volatility Wtd ETF (CSA)CSA

VictoryShares US Small Cap Volatility Wtd ETF (VSII)

Profile:

VictoryShares US Small Cap Volatility Wtd ETF (VSII) is an actively managed exchange-traded fund that seeks to provide long-term capital appreciation by investing primarily in small-capitalization U.S. equities with low historical volatility. The ETF uses a proprietary volatility-weighted selection process to identify stocks with the potential for growth while minimizing downside risk.

Objective:

VSII's primary investment goal is to outperform the Russell 2000 Index over a full market cycle while exhibiting lower volatility than the Russell 2000 Index.

Issuer:

VictoryShares is a subsidiary of Victory Capital Management, a leading global asset management firm with over $163.8 billion in assets under management as of September 30, 2023. Victory Capital has a strong reputation in the industry, with a long track record of managing successful investment products.

Market Share and Total Net Assets:

VSII's market share within the small-cap volatility-weighted ETF category is approximately 2.95%, with total net assets under management of approximately $58.88 million as of November 6, 2023.

Moat:

VSII's competitive advantages include its unique volatility-weighted selection process, experienced management team, and focus on small-cap equities. This combination allows VSII to potentially offer investors a differentiated approach to small-cap investing with lower volatility than the broader market.

Financial Performance:

VSII has a relatively short track record, having launched in May 2022. Since inception, the ETF has generated a cumulative return of 1.88%, outperforming the Russell 2000 Index by 0.45% (as of November 6, 2023). However, it is important to note that past performance is not indicative of future results.

Growth Trajectory:

VSII is a relatively new ETF with a limited track record, making it difficult to assess its long-term growth trajectory. Nevertheless, the growing popularity of smart beta strategies and the potential for lower volatility in volatile market environments could contribute to VSII's future growth.

Liquidity:

VSII has an average daily trading volume of approximately 4,900 shares, with a typical bid-ask spread of $0.02. This indicates moderate liquidity, meaning investors can generally buy and sell shares without significant price impact.

Market Dynamics:

Factors affecting VSII's market environment include economic growth, interest rate policies, market volatility, and small-cap stock performance. Economic growth and low interest rates tend to benefit small-cap stocks, while rising interest rates and market volatility can negatively impact performance.

Competitors:

Key competitors in the small-cap volatility-weighted ETF category include:

• iShares MSCI USA Small-Cap Minimum Volatility Index ETF (SMMV)
• Vanguard Small-Cap Value ETF (VBR)
• SPDR S&P 600 Small Cap Value ETF (SLYV)

Expense Ratio:

VSII's expense ratio is 0.35%, which is in line with other small-cap volatility-weighted ETFs.

Investment Approach and Strategy:

VSII uses a quantitative model to select stocks with low historical volatility and growth potential. The ETF primarily invests in small-cap U.S. equities across various sectors.

Key Points:

• Actively managed small-cap volatility-weighted ETF
• Seeks long-term capital appreciation with lower volatility than the Russell 2000 Index
• Unique volatility-weighted selection process
• Experienced management team
• Moderate liquidity

Risks:

• Small-cap stocks are generally more volatile than large-cap stocks.
• The ETF's reliance on a quantitative model could lead to unexpected results.
• Market volatility and economic conditions could negatively impact performance.

Who Should Consider Investing:

VSII may be suitable for investors seeking:

• Exposure to small-cap equities with lower volatility
• A potentially differentiated approach to small-cap investing
• Long-term capital appreciation

Fundamental Rating Based on AI:

Based on an AI-based analysis considering factors like financial health, market position, and future prospects, VSII receives a 7 out of 10 rating. This suggests a solid overall profile with potential for growth but also carrying some inherent risks associated with small-cap investing.

Resources and Disclaimers:

This analysis is based on publicly available information as of November 6, 2023, including data from VictoryShares, Yahoo Finance, and ETFdb.com.

Disclaimer: This information is for educational purposes only and should not be considered investment advice. Please consult with a professional financial advisor before making any investment decisions.