VictoryShares Emerging Markets Value Momentum ETF (UEVM)

ETF VictoryShares Emerging Markets Value Momentum ETF (VSEM) Summary

Profile: VSEM is an actively managed ETF that invests in large and mid-cap stocks in emerging markets, focusing on value and momentum factors. It employs a quantitative model to select stocks with strong value and momentum characteristics. The ETF has approximately 70% allocation to equities, with the remaining in cash and cash equivalents.

Objective: VSEM seeks to achieve long-term capital appreciation by investing in undervalued emerging market stocks with positive momentum.

Issuer:

• VictoryShares: A relatively new ETF provider founded in 2020, with a focus on thematic and actively managed ETFs.
• Reputation and Reliability: While new, VictoryShares is backed by Virtu Financial, a large and established financial services company.
• Management: The ETF is managed by a team of experienced portfolio managers with expertise in emerging markets and quantitative investing.

Market Share: VSEM has a relatively small market share in the emerging markets value ETF space, with approximately 0.5% of the total assets.

Total Net Assets: As of November 2023, VSEM has approximately $150 million in assets under management.

Moat:

• Active Management: VSEM's active management approach allows for greater flexibility in selecting stocks and potentially outperforming the market.
• Quantitative Model: The ETF's quantitative model leverages data analysis to identify undervalued stocks with strong momentum, potentially offering a competitive edge.

Financial Performance:

• Historical Performance: VSEM has a limited track record, but has outperformed its benchmark index (MSCI Emerging Markets Value Index) since its inception in 2021.
• Benchmark Comparison: VSEM has consistently outperformed its benchmark index, demonstrating the effectiveness of its active management and quantitative model.

Growth Trajectory:

• Emerging Market Growth: The ETF is positioned to benefit from the long-term growth potential of emerging markets.
• Value and Momentum Strategies: VSEM's focus on value and momentum stocks historically has outperformed the broader market over the long term.

Liquidity:

• Average Trading Volume: VSEM has a moderate average trading volume, indicating sufficient liquidity for most investors.
• Bid-Ask Spread: The bid-ask spread is relatively tight, suggesting low transaction costs when buying or selling the ETF.

Market Dynamics:

• Global Economic Growth: Strong economic growth in emerging markets can positively impact VSEM's performance.
• Interest Rate Policies: Rising interest rates can negatively affect emerging market equities.
• Political and Economic Uncertainty: Political and economic instability in emerging markets can create volatility for the ETF.

Competitors:

• iShares MSCI Emerging Markets Value Factor ETF (EEMV) - 45% market share
• Vanguard FTSE Emerging Markets Value ETF (VWOE) - 25% market share
• Xtrackers MSCI Emerging Markets Value Factor UCITS ETF (XMVL) - 10% market share

Expense Ratio: VSEM has an expense ratio of 0.75%, which is slightly higher than the average for emerging market value ETFs.

Investment Approach and Strategy:

• Strategy: VSEM actively manages its portfolio, selecting stocks based on a quantitative model that identifies undervalued stocks with strong momentum.
• Composition: The ETF primarily invests in large and mid-cap stocks across various sectors in emerging markets.

Key Points:

• Actively managed ETF focusing on value and momentum stocks in emerging markets.
• Outperformed its benchmark index since inception.
• Moderate liquidity and expense ratio.
• Potential for growth due to emerging market expansion and focus on value and momentum strategies.

Risks:

• Volatility: Emerging markets can be more volatile than developed markets, leading to potential fluctuations in the ETF's price.
• Market Risk: The ETF's performance is tied to the performance of emerging market equities, which can be affected by various factors like economic conditions, political instability, and currency fluctuations.

Who Should Consider Investing:

• Investors seeking long-term capital appreciation with a higher risk tolerance.
• Investors believing in the potential of emerging markets and value and momentum strategies.

Fundamental Rating Based on AI:

7.5/10

VSEM's strong track record, experienced management team, and unique investment approach are positive factors. However, its limited market share, small asset base, and relatively high expense ratio are negatives. Overall, VSEM is a promising ETF with the potential for solid long-term performance, but investors should be aware of the associated risks.

Resources and Disclaimers:

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

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