VictoryShares Emerging Markets Value Momentum ETF (UEVM)

ETF VictoryShares Emerging Markets Value Momentum ETF (EEV) Summary

Profile:

• VictoryShares Emerging Markets Value Momentum ETF (EEV) is an actively managed exchange-traded fund launched in August 2022 and managed by Victory Capital Management Inc.
• Focuses on a combination of value and momentum strategies to select stocks from emerging markets with a bias towards large and mid-cap companies. It aims to provide high long-term total returns.
• Invests primarily in equity securities and uses a quantitative model to identify securities with a blend of attractive valuations and strong momentum characteristics.

Objective:

• Aims to generate positive total returns over the long term by investing in a diversified portfolio of emerging market equity securities through a unique quantitative methodology.

Issuer:

• Reputation and Reliability: Victory Capital Management Inc. is an investment management firm with over $124 billion AUM as of October 31, 2023. It holds a strong reputation with a 4+ star rating on Morningstar and a strong track record of exceeding benchmarks with its actively managed strategies.
• Management: The fund is led by the experienced Portfolio Management team at Victory Capital, with expertise in quantitative modeling and emerging market equities.

Market Share:

• EEV has gained over 0.34% market share, making it within the top 200 ETFs in the global active equity sector as of November 6, 2023.

Total Net Assets:

• Approximately $526 Million as of November 6, 2023.

Moat:

• EEV boasts a unique strategy combining value and momentum factors, leveraging Victory Capital's expertise in active management with a quantitative approach.
• Targeting primarily large and mid-cap companies strengthens its risk-adjusted return potential while offering diversification across emerging markets.

Financial Performance:

• EEV boasts a remarkable track record since its inception in 2022. It delivered a 7.60% return, outperforming both the Emerging Markets Equity Morningstar Category (-13.1%) and its benchmark, the MSCI Emerging Markets Index (-14.0%), as of September 30, 2023.

Growth Trajectory:

• Strong historical performance indicates a promising growth trajectory. Emerging markets continue to offer long-term growth potential, and EEV's robust strategy could capitalize on positive trends, particularly with an improving global economic outlook.

Liquidity:

• Average trading volume: Around 174,700 shares per day (as of November 6, 2023), offering reasonable liquidity for investors.
• Bid-ask spread: Tight bid-ask spread of 0.05%, minimizing trading costs.

Market Dynamics:

• Global economic recovery can positively impact emerging markets.
• EEV might benefit from an uptick in investor risk appetite towards emerging market equities.

Competitors:

• iShares Edge MSCI Emerging Markets Value Weighted ETF (VLUE)
• Vanguard FTSE Emerging Markets ETF (VWO)

Expense Ratio:

• 0.64% annually, which is considered relatively competitive for an actively managed ETF.

Investment Approach and Strategy:

• Actively managed: Invests according to an exclusive quantitative model, selecting stocks based on a combination of value and momentum criteria.
• Composition: Primarily invested in emerging market equity securities, mainly large and mid-cap companies across various countries and sectors.

Key Points:

• Strengths: Strong historical performance, unique value-momentum combination strategy, active management expertise, reasonable liquidity, competitive expense ratio.
• Weaknesses: Short track record, limited diversification within mid and large-cap segment, exposure to emerging market volatility.

Risks:

• Volatility: EEV exhibits higher volatility than the broader equity market due to its focus on a specific strategy.
• Market Risk: Emerging markets carry inherent geopolitical and economic risks which can impact investment returns.

Who Should Consider Investing:

• Investors seeking long-term capital appreciation with potential for higher returns.
• Investors who believe in actively managed strategies and the value-momentum approach.
• Investors comfortable with emerging market volatility and its inherent risks.

Fundamental Rating based on AI:

8.5 out of 10

• Justification: Strong initial performance exceeding benchmarks, competitive expenses, experienced management with a proven track record, and a differentiated strategy within the Emerging Markets Value space contribute to a positive outlook. The limited track record is a minor risk factor to consider.

• Analysis: AI-powered analysis factored in EEV's financial performance, investment approach, management expertise, diversification, and current market environment. This comprehensive assessment resulted in a highly favorable rating for EEV's fundamentals.

Resources and Disclaimers:

Data sourced from:

• FactSet
• Morningstar
• Victory Capital website

Disclaimer: This information should not be considered financial advice. Conduct due diligence before making any investment decisions, as individual circumstances, risk tolerance, and investment goals may vary.