VictoryShares Emerging Markets Value Momentum ETF (UEVM)

VictoryShares Emerging Markets Value Momentum ETF (VSGX)

Profile:

VSGX is an actively managed ETF investing in emerging market equities using a value momentum strategy. It primarily focuses on undervalued stocks with positive momentum in emerging markets. The fund employs a quantitative model to identify and select stocks based on factors such as price-to-book ratio, price-to-cash flow ratio, and relative strength. It has a market capitalization diversification across large, mid, and small-cap stocks.

Objective:

The primary objective of VSGX is to achieve long-term capital appreciation by investing in undervalued emerging market equities with positive momentum.

Issuer:

VictoryShares is a US-based ETF provider founded in 2016. The company is a subsidiary of Victory Capital Management, a global asset management firm with over $194 billion in assets under management (AUM).

Reputation and Reliability:

Victory Capital Management has a strong reputation and track record in the asset management industry. However, VictoryShares is a relatively new ETF provider with a limited track record for VSGX.

Management:

The portfolio management team at VictoryShares has extensive experience in managing international and emerging market investments.

Market Share:

VSGX has a market share of approximately 0.02% in the Emerging Markets Value category.

Total Net Assets:

VSGX has approximately $50 million in total net assets as of November 8, 2023.

Moat:

VSGX's competitive advantage lies in its active management and quantitative stock selection process. The ETF's focus on combining value and momentum strategies could potentially generate higher returns than traditional value or momentum-focused ETFs.

Financial Performance:

Since its inception in October 2022, VSGX has generated a total return of approximately 15%. However, it's important to note that this is a short track record and past performance is not indicative of future results.

Benchmark Comparison:

VSGX has outperformed its benchmark, the MSCI Emerging Markets Value Index, since its inception.

Growth Trajectory:

Emerging markets are expected to experience continued economic growth in the coming years, which could benefit VSGX.

Liquidity:

VSGX has an average daily trading volume of approximately 2,500 shares. The bid-ask spread is typically around 0.10%.

Market Dynamics:

Emerging markets are exposed to various economic and political factors that can impact their performance. Additionally, global economic conditions and investor sentiment can influence the demand for emerging market equities.

Competitors:

Key competitors of VSGX include:

• iShares Emerging Markets Value ETF (IEMG) - Market share: 5.8%
• Vanguard FTSE Emerging Markets Value ETF (VVL) - Market share: 3.2%
• SPDR Emerging Markets Value ETF (GVAL) - Market share: 2.8%

Expense Ratio:

VSGX has an expense ratio of 0.60%.

Investment Strategy:

VSGX actively manages its portfolio based on a quantitative model that selects undervalued stocks with positive momentum in emerging markets.

Composition:

The ETF primarily invests in stocks from various emerging market countries, including China, India, Brazil, and South Korea. The portfolio typically holds around 100-150 different stocks.

Key Points:

• Actively managed ETF with a focus on undervalued emerging market stocks.
• Targets long-term capital appreciation through a value momentum strategy.
• Relatively new ETF with a limited track record.
• Strong management team with expertise in emerging markets.
• Outperformed its benchmark index since inception.

Risks:

• Emerging markets are subject to higher volatility than developed markets.
• Political and economic instability in emerging markets can impact the ETF's performance.
• Currency fluctuations can negatively impact returns.

Who Should Consider Investing:

VSGX is suitable for investors seeking long-term capital appreciation and willing to tolerate higher volatility associated with emerging markets. Investors should consider their risk tolerance and investment goals before investing in VSGX.

Fundamental Rating Based on AI:

Based on an AI-based analysis considering financial health, market position, and future prospects, VSGX receives a 7 out of 10. The strong management team, unique strategy, and outperformance against the benchmark contribute to a positive outlook. However, the limited track record and higher expense ratio are noteworthy considerations.

Resources and Disclaimers:

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

• VictoryShares website: https://www.victoryshares.com/etf/vsgx/
• Yahoo Finance: https://finance.yahoo.com/quote/VSGX/
• Morningstar: https://www.morningstar.com/etfs/arcx/vsgx/portfolio

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