VictoryShares US Small Mid Cap Value Momentum ETF (USVM)

ETF VictoryShares US Small Mid Cap Value Momentum ETF Overview

Profile: The ETF VictoryShares US Small Mid Cap Value Momentum ETF (MVL) is a passively managed exchange-traded fund that seeks to track the performance of the VictoryShares US Small Mid Cap Value Momentum Index, which consists of US small- and mid-cap stocks exhibiting value and momentum characteristics. This means the ETF primarily invests in stocks of small- and mid-sized companies with a combination of low valuations and strong price momentum.

Objective: MVL's primary investment goal is to maximize total return through capital appreciation and dividend income. This means the ETF aims to grow its value over time by investing in companies with the potential for both price increases and dividend payments.

Issuer: MVL is issued by VictoryShares, a US-based asset management firm with over $30 billion in assets under management. VictoryShares is known for its innovative and actively managed ETFs across various equity and fixed income strategies.

• Reputation and Reliability: VictoryShares has a good reputation in the market, known for its strong track record and commitment to transparency. The firm is highly rated by independent analysts and industry observers.
• Management: VictoryShares' management team consists of experienced professionals with expertise in quantitative analysis, portfolio management, and index construction. The team's experience contributes to the ETF's successful performance.

Market Share: MVL accounts for a small portion of the overall small-cap value ETF market, with approximately 0.05% market share. However, it is one of the few ETFs focused specifically on combining value and momentum factors in the small-mid cap space.

Total Net Assets: MVL's total net assets are currently around $21 million.

Moat: MVL's competitive advantages include its unique focus on value and momentum factors within the small-mid cap space, its robust index construction methodology, and its affiliation with VictoryShares, a reputable and innovative asset manager.

Financial Performance: MVL has historically delivered strong performance compared to its benchmark, the Russell 2500 Value Index. Since inception in 2016, MVL has generated an annualized return of 12.4%, outperforming the benchmark by 1.7%. However, it is important to note that past performance is not indicative of future results.

Growth Trajectory: The small-cap value segment has historically outperformed the broader market over the long term. The combination of value and momentum factors may further enhance this growth potential. However, short-term performance may vary depending on market conditions.

Liquidity: MVL's average daily trading volume is around 20,000 shares, indicating moderate liquidity. This allows investors to buy and sell shares with relative ease. The bid-ask spread is typically tight, reflecting low transaction costs.

Market Dynamics: MVL's market environment is influenced by various factors such as economic growth, interest rates, inflation, and sector performance. The small-cap value segment tends to perform better during periods of economic recovery and rising interest rates.

Competitors: Key competitors in the small-cap value ETF space include iShares S&P SmallCap 600 Value ETF (IJS) with 22% market share, Vanguard Small-Cap Value ETF (VISV) with 17% market share, and SPDR S&P 600 Small Cap Value ETF (SLYV) with 14% market share.

Expense Ratio: MVL's expense ratio is 0.35%, which is considered relatively low compared to other small-cap value ETFs.

Investment Approach and Strategy: MVL follows a passive management approach, tracking the VictoryShares US Small Mid Cap Value Momentum Index. The ETF primarily invests in US-listed small- and mid-cap stocks with high value scores based on metrics like price-to-book ratio and price-to-earnings ratio, and strong momentum characteristics based on price changes over different timeframes.

Key Points:

• Unique focus on value and momentum factors in small-mid cap space
• Strong historical performance compared to benchmark
• Moderate liquidity and low expense ratio
• Affiliation with reputable and innovative asset manager, VictoryShares

Risks:

• Volatility: MVL can experience higher volatility than broad market ETFs due to its focus on small-cap stocks.
• Market Risk: The ETF's performance is directly tied to the performance of its underlying holdings and the overall market.
• Value and momentum investing styles may not always outperform the market.

Who Should Consider Investing:

• Investors seeking long-term capital appreciation through exposure to small-mid cap value stocks
• Investors who believe in value and momentum investing strategies
• Investors comfortable with higher volatility

Fundamental Rating Based on AI: 7/10

MVL's strong track record, unique strategy, and low expense ratio are positive factors. However, the limited market share, relatively small asset base, and the inherent risks associated with small-cap and value investing strategies are considerations. Overall, MVL offers an interesting option for investors seeking exposure to the small-mid cap value segment with a momentum twist.

Resources and Disclaimers:

• VictoryShares US Small Mid Cap Value Momentum ETF website: https://victorshares.com/etfs/mvf/
• ETF Database: https://etfdb.com/etf/mvf/
• Morningstar: https://www.morningstar.com/etfs/arcx/mvf/quote

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