VictoryShares US Small Cap High Div Volatility Wtd ETF (CSB)CSB

ETF VictoryShares US Small Cap High Div Volatility Wtd ETF (VSML) Overview

Profile:

The ETF VictoryShares US Small Cap High Div Volatility Wtd ETF (VSML) focuses on small-cap U.S. stocks with high dividend yields and volatility-weighted allocation. It aims to provide investors with income and growth potential through a diversified portfolio of small-cap companies with strong dividend track records.

Objective:

VSML's primary objective is to generate high current income through dividends while mitigating downside risk through volatility weighting. It seeks to achieve this by investing in a portfolio of small-cap stocks with above-average dividend yields and weighting them based on their historical volatility.

Issuer:

VictoryShares is an ETF issuer with a growing range of thematic and niche-focused ETFs. They aim to provide investors with innovative and unique investment solutions. The company has a good reputation and track record in the market, with strong expertise in thematic investing strategies.

Market Share:

VSML holds a small market share within the U.S. small-cap high dividend ETF space, but it has seen consistent growth in assets under management since its inception.

Total Net Assets:

As of October 26, 2023, VSML has approximately $150 million in total net assets.

Moat:

VSML's competitive advantages include its unique volatility-weighted approach, which aims to minimize downside risk while maintaining high dividend income potential. Additionally, VSML's focus on a specific market segment (small-cap, high dividend stocks) allows it to cater to a niche investor base looking for income and diversification within the small-cap space.

Financial Performance:

VSML has delivered competitive returns compared to its benchmark and peers since its inception. However, past performance is not always indicative of future results. Investors should conduct further research on the ETF's performance and risks before investing.

Growth Trajectory:

The ETF has shown positive growth trends in both assets under management and investor interest. Its unique strategy and focus on high-dividend small-cap stocks may attract further investments in the future.

Liquidity:

VSML enjoys moderate liquidity with an average daily trading volume of over 20,000 shares. The bid-ask spread is also relatively tight, making it easy for investors to buy and sell shares.

Market Dynamics:

Factors affecting VSML's market environment include economic growth, small-cap stock performance, interest rate movements, and investor sentiment towards high-dividend strategies.

Competitors:

Key competitors within the U.S. small-cap high dividend ETF space include:

• iShares US Small Cap High Dividend ETF (SCZ)
• Vanguard Small-Cap Value ETF (VBR)
• SPDR S&P 600 Small Cap High Dividend ETF (SDY)

Expense Ratio:

VSML has an expense ratio of 0.35%, which is slightly higher than some of its competitors but still considered reasonable for an actively managed ETF.

Investment Approach and Strategy:

• Strategy: VSML uses a quantitative model to select small-cap stocks with high dividend yields and weight them in the portfolio based on their inverse volatility. This approach aims to prioritize stocks with higher dividend yields and lower volatility.
• Composition: The ETF primarily invests in common stocks of small-cap U.S. companies with above-average dividend yields. The portfolio may also include options contracts to enhance income generation and risk management.

Key Points:

• Focuses on high-dividend small-cap stocks with volatility-weighted allocation.
• Aims to generate high current income with downside risk management.
• Actively managed with a quantitative investment approach.
• Moderate liquidity and expense ratio compared to its peers.

Risks:

• Small-cap stocks are generally more volatile than large-cap stocks.
• High dividend-paying stocks may be more susceptible to cuts or reductions in their dividends.
• The quantitative model used for stock selection and weighting may not always accurately predict future performance.

Who Should Consider Investing:

• Investors seeking high dividend income from small-cap stocks.
• Investors with a moderate risk tolerance and a long-term investment horizon.
• Investors comfortable with quantitative investment strategies.

Fundamental Rating Based on AI: 7.5

VSML exhibits strong fundamentals based on an AI assessment. Its unique volatility-weighted approach, focus on high-dividend stocks, and experienced management team contribute to its strengths. However, its relatively small size and higher expense ratio compared to some competitors are factors to consider.

Resources and Disclaimers:

• VictoryShares US Small Cap High Div Volatility Wtd ETF website: https://www.victoryshares.com/etfs/vsml/
• ETF.com VSML page: https://www.etf.com/etf-profile/VSML

Disclaimer:

This analysis is provided for informational purposes only and should not be considered investment advice. Investors should conduct independent research and due diligence before making any investment decisions.