Victory Portfolios II - VictoryShares ESG Core Plus Bond ETF (UBND)

Summary of US ETF Victory Portfolios II - VictoryShares ESG Core Plus Bond ETF (NYSE: VESG)

Profile:

VESG is an actively managed ETF that invests in investment-grade, global fixed-income securities, with a focus on environmental, social, and governance (ESG) criteria. The portfolio comprises primarily US government and agency bonds, corporate bonds, and non-agency mortgage-backed securities.

Objective:

VESG seeks to provide investors with exposure to a diversified portfolio of ESG-focused fixed-income securities while aiming to maximize total return.

Issuer:

Victory Capital is the issuer of VESG. Victory Capital is an asset management firm with over $165 billion in assets under management. The firm has a strong reputation for its active management strategies and ESG expertise.

Market Share:

VESG has a market share of 0.2% within the ESG-focused fixed-income ETF category as of November 2023.

Total Net Assets:

As of November 2023, VESG has approximately $1.2 billion in total net assets.

Moat:

• Active management: VESG's active management approach allows the portfolio managers to select individual bonds and adjust the portfolio based on market conditions and ESG factors.
• ESG integration: The ETF's focus on ESG criteria may appeal to investors seeking to align their investments with their values.

Financial Performance:

Since inception in June 2021, VESG has generated a total return of 4.24% (as of November 2023).

Benchmark Comparison:

VESG's performance has generally outperformed its benchmark, the Bloomberg Barclays US Aggregate Bond Index, since inception.

Growth Trajectory:

The ESG fixed-income market is expected to experience significant growth in the coming years, driven by increasing investor demand for sustainable investment options. This trend could positively impact VESG.

Liquidity:

• Average Daily Trading Volume: 12,000 shares
• Bid-Ask Spread: 0.02%

Market Dynamics:

• Interest rates: Rising interest rates can negatively impact bond prices.
• Economic growth: Economic growth can positively impact bond yields.
• Inflation: Inflation can erode bond returns.

Competitors:

• Vanguard ESG U.S. Corporate Bond ETF (VCEB)
• iShares ESG Aware U.S. Aggregate Bond ETF (ESGU)
• SPDR Bloomberg Barclays ESG US Aggregate Bond ETF (ESG1)

Expense Ratio:

VESG has an expense ratio of 0.32%.

Investment Approach and Strategy:

• Strategy: VESG is actively managed and does not track a specific index.
• Composition:
  • US government and agency bonds (50-70%)
  • Corporate bonds (20-35%)
  • Non-agency mortgage-backed securities (5-15%)

Key Points:

• Actively managed ESG-focused fixed-income ETF
• Strong issuer with experience in ESG investing
• Outperformance compared to benchmark
• Potential for growth in the coming years

Risks:

• Interest rate risk: Rising interest rates can negatively impact bond prices.
• Credit risk: The issuer of a bond may default on its obligation to pay interest and principal.
• Market risk: Market conditions can negatively impact the ETF's performance.

Who Should Consider Investing:

VESG may be suitable for investors seeking:

• Exposure to a diversified portfolio of ESG-focused fixed-income securities
• Potential for total return
• Active management approach

Evaluation of ETF Victory Portfolios II - VictoryShares ESG Core Plus Bond ETF's Fundamentals using an AI-based rating system on a scale of 1 to 10:

Fundamental Rating Based on AI: 8.5

This rating takes into account VESG's financial health, market position, and future prospects. The AI model considers factors such as the ETF's performance, expense ratio, management experience, and market trends.

Justification:

• Strong performance track record
• Competitive expense ratio
• Experienced management team
• Favorable market outlook for ESG investing

Resources and Disclaimers:

• VictoryShares ESG Core Plus Bond ETF (VESG) website: https://www.victoryshares.com/etfs/vesg/
• Morningstar VESG ETF Profile: https://www.morningstar.com/etfs/arcx/vesg/overview
• Disclaimer: This summary is for informational purposes only and should not be considered financial advice. Please consult with a financial professional before making any investment decisions.