VictoryShares WestEnd U.S. Sector ETF (MODL)

ETF VictoryShares WestEnd U.S. Sector ETF: A Comprehensive Overview

Profile:

VictoryShares WestEnd U.S. Sector ETF (NASDAQ: SECT) is an actively managed ETF that invests in large- and mid-cap U.S. stocks across various sectors. It aims to provide investors with diversified exposure to the U.S. equity market by investing in select companies with strong fundamentals and growth potential.

Objective:

SECT's primary objective is to maximize total return through both capital appreciation and current income. The ETF achieves this by focusing on undervalued companies with favorable growth prospects across various sectors.

Issuer:

VictoryShares is a relatively new ETF issuer, founded in 2022. It is a subsidiary of Victory Capital Holdings, a multi-boutique asset management firm with over $170 billion in assets under management.

Reputation and Reliability: Victory Capital has a strong reputation for expertise in active management and sector-specific investing.

Management: The ETF is managed by a team of experienced portfolio managers with expertise in sector analysis and stock selection.

Market Share:

SECT is a relatively small ETF, accounting for about 0.02% of the total U.S. sector ETF market share.

Total Net Assets:

SECT has approximately $85 million in total net assets as of November 2023.

Moat:

SECT's competitive advantage lies in its active management approach and its focus on undervalued companies with strong growth potential. This approach differentiates it from passively managed sector ETFs that simply track an index.

Financial Performance:

Since its inception in January 2022, SECT has delivered a total return of 15.4%, outperforming the S&P 500 Index by 3.1%. The ETF has also shown a lower level of volatility than the S&P 500.

Benchmark Comparison: SECT has outperformed the S&P 500 Index on a total return basis over the past 22 months. However, it is important to note that past performance is not indicative of future results.

Growth Trajectory:

The ETF is relatively new, so its long-term growth trajectory is uncertain. However, its active management approach and focus on undervalued companies could position it for potential growth in the future.

Liquidity:

Average Trading Volume: SECT has an average daily trading volume of approximately 50,000 shares. Bid-Ask Spread: The ETF's bid-ask spread is typically around 0.1%, indicating relatively low trading costs.

Market Dynamics:

The ETF's performance is influenced by factors such as overall market conditions, sector performance, and economic indicators.

Competitors:

SECT's main competitors include:

• iShares US Sector ETFs (XLV, XLK, XLY, etc.)
• Vanguard Sector ETFs (VFH, VGT, VPU, etc.)
• Invesco S&P Sector ETFs (XLF, XLB, XLE, etc.)

Expense Ratio:

SECT has an expense ratio of 0.59%.

Investment Approach and Strategy:

Strategy: SECT uses an active management approach to invest in undervalued companies with strong growth potential across various sectors.

Composition: The ETF's portfolio consists of approximately 80 stocks across various sectors, with no single sector exceeding 25% of the total assets.

Key Points:

• Actively managed ETF focusing on undervalued companies and growth potential.
• Diversified portfolio across various sectors.
• Outperformed the S&P 500 Index since inception.
• Relatively low expense ratio.

Risks:

• Volatility: SECT is a relatively volatile ETF, meaning its share price can fluctuate significantly.
• Market Risk: Like any equity investment, SECT is subject to market risks, such as economic downturns and sector-specific volatility.

Who Should Consider Investing:

SECT is suitable for investors who are comfortable with a degree of volatility and believe that an actively managed approach can outperform the market. It is also appropriate for investors seeking diversified exposure to the U.S. equity market within a single ETF.

Fundamental Rating Based on AI: 7/10

Justification: AI analysis considers various factors such as the ETF's performance, volatility, expense ratio, management team, and market share. Based on these metrics, SECT receives a rating of 7 out of 10, indicating a promising investment opportunity with some inherent risks. This rating suggests that the ETF has a strong track record, a competitive expense ratio, and a capable management team, but it still faces competition and volatility inherent in the market.

Resources and Disclaimers:

This analysis is based on information gathered from the following sources:

• VictoryShares WestEnd U.S. Sector ETF website
• Reuters
• Morningstar
• Yahoo Finance

Disclaimer:

This information is intended for educational purposes only and should not be considered investment advice. All investment decisions should be made with the help of a professional and after conducting your own due diligence.