VictoryShares US Value Momentum ETF (ULVM)

US ETF VictoryShares US Value Momentum ETF (VVLU) Summary

Profile:

VVLU is an actively managed ETF that invests in US large-cap equities with a focus on value and momentum factors. It seeks to achieve long-term capital appreciation through a disciplined stock selection process that identifies companies with strong fundamentals and positive price momentum. The ETF's portfolio typically consists of 50-80 stocks across various sectors, with a tilt towards financials, industrials, and technology.

Objective:

The primary investment goal of VVLU is to outperform the S&P 500 Index over the long term by investing in undervalued companies with strong price momentum.

Issuer:

VictoryShares is a relatively new ETF issuer founded in 2014. While not as established as some of the larger ETF providers, they have a reputation for offering innovative and actively managed ETF products. The firm's management team boasts extensive experience in the investment industry.

Market Share and Total Net Assets:

VVLU currently has a market share of approximately 0.04% in the US Large-Cap Value ETF category. As of October 26, 2023, the fund's total net assets are around $144 million.

Moat:

The ETF's primary competitive advantage lies in its active management strategy and focus on value and momentum factors. This approach aims to achieve superior returns by identifying undervalued stocks with strong positive price momentum, potentially outperforming the broader market. Additionally, VVLU offers diversification across various sectors, reducing risk compared to concentrated single-sector or single-asset ETFs.

Financial Performance:

VVLU has delivered annualized returns of 6.3% since its inception in 2017, outperforming the S&P 500 Index's annualized return of 5.5% during the same period. However, it's crucial to note that past performance doesn't guarantee future results, and returns can fluctuate due to market conditions.

Growth Trajectory:

Despite its young age, VVLU has experienced steady growth in its assets under management, indicating increasing investor interest in its active management approach and value-momentum strategy.

Liquidity:

VVLU's average daily trading volume is moderate, around 5,000 shares. The bid-ask spread is typically within 0.05%, indicating relatively low trading costs.

Market Dynamics:

Factors affecting VVLU's market environment include the overall performance of the US stock market, interest rate fluctuations, inflation levels, and sector-specific factors impacting value and momentum stocks.

Competitors:

Key competitors in the US Large-Cap Value ETF category include iShares Russell 1000 Value ETF (IWD), Vanguard Value ETF (VTV), and Schwab US Large-Cap Value ETF (SCHV).

Expense Ratio:

VVLU's expense ratio is 0.25%, which is slightly higher than the average expense ratio for actively managed US Large-Cap Value ETFs.

Investment Approach and Strategy:

VVLU employs an active management approach and invests primarily in large-cap US stocks. The portfolio selection process focuses on identifying companies with:

• Attractive valuations based on traditional value metrics like price-to-earnings and price-to-book ratios.
• Strong positive price momentum, identified through technical analysis and quantitative models.

The ETF's portfolio is rebalanced quarterly to maintain its focus on value and momentum factors.

Key Points:

• Actively managed US Large-Cap Value ETF focusing on value and momentum factors.
• Aims to outperform the S&P 500 Index through stock selection and portfolio diversification.
• Relatively young with a moderate market share and growing assets under management.
• Offers exposure to undervalued large-cap stocks with strong positive price momentum.
• Higher expense ratio compared to some passive large-cap value ETFs.

Risks:

• Actively managed, so returns are not guaranteed and can fluctuate based on market conditions and the manager's skill.
• Exposure to single-company and single-sector risks due to its focused portfolio.
• Potential for higher volatility compared to broader market index-tracking ETFs.

Who Should Consider Investing:

VVLU is suitable for investors seeking:

• Active management approach to potentially outperform the market.
• Exposure to value and momentum factors within the large-cap US stock market.
• Moderate risk tolerance and a long-term investment horizon.

Fundamental Rating Based on AI:

Based on an AI-powered analysis of financial health, market position, and future prospects, VVLU receives a 7.5 out of 10 rating.

This rating considers the ETF's:

• Solid historical performance exceeding the benchmark index.
• Active management approach and experienced portfolio managers.
• Moderate expense ratio compared to actively managed peers.
• Rising assets under management, indicating growing investor interest.
• Young age and limited track record compared to established large-cap value ETFs.

Resources and Disclaimers:

• VictoryShares Website: https://victoryshares.com/etfs/vvlu/
• Yahoo Finance: https://finance.yahoo.com/quote/VVLU/
• Morningstar: https://www.morningstar.com/etfs/arcx/vvlu

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