VictoryShares US 500 Enhanced Volatility Wtd ETF (CFO)

Overview

The VictoryShares US 500 Enhanced Volatility Wtd ETF (SPVU) seeks to provide investment results that closely correspond, before fees and expenses, to the performance of the Nasdaq Victory US 500 Enhanced Volatility Weighted Index. It aims to overweight less volatile stocks within the S&P 500, seeking enhanced risk-adjusted returns.

Reputation and Reliability

Victory Capital is a well-regarded asset management firm with a diverse range of investment products. They have a solid track record, although the long-term performance history of this specific ETF is shorter than some competitors.

Management Expertise

Victory Capital has experienced portfolio managers and analysts who specialize in quantitative and rules-based investment strategies, which is relevant for this volatility-weighted ETF.

Goal

To track the performance of the Nasdaq Victory US 500 Enhanced Volatility Weighted Index.

Investment Approach and Strategy

Strategy: The ETF uses a rules-based approach to weight stocks in the S&P 500 based on their volatility. Stocks with lower volatility receive a higher weighting.

Composition The ETF holds stocks of companies within the S&P 500, but the weighting is determined by their trailing volatility rather than market capitalization.

Market Share: SPVU's market share within the broad S&P 500 ETF market is relatively small compared to the largest capitalization-weighted ETFs.

Total Net Assets (AUM): 329914369

Key Competitors

• Invesco S&P 500 Low Volatility ETF (SPLV)
• iShares MSCI USA Minimum Volatility Factor ETF (USMV)
• AGFiQ US Market Neutral Anti-Beta Fund (BTAL)

Competitive Landscape

The competitive landscape is dominated by ETFs focusing on low volatility strategies. SPVU distinguishes itself through its specific weighting methodology and index provider. Advantages include potentially higher risk-adjusted returns, while disadvantages might involve higher tracking error and slightly different sector exposures compared to competitors.

Historical Performance: Historical performance data should be sourced from financial websites like Yahoo Finance or Bloomberg. Performance varies based on market conditions and volatility regimes.

Benchmark Comparison: The ETF's performance should be compared against the S&P 500 and its specific volatility-weighted index to assess its effectiveness in delivering enhanced risk-adjusted returns.

Expense Ratio: 0.29

Average Trading Volume

The ETF's average trading volume can be obtained from financial websites; moderate liquidity is generally observed.

Bid-Ask Spread

The bid-ask spread should be monitored to assess trading costs, which can vary depending on market conditions; the ETF generally has a tight bid-ask spread.

Market Environment Factors

Economic indicators, interest rates, and market volatility significantly influence the performance of low-volatility strategies, affecting the performance of SPVU.

Growth Trajectory

The growth trajectory of SPVU depends on investor demand for low-volatility strategies and its ability to consistently deliver attractive risk-adjusted returns. There aren't changes to strategy and holdings unless dictated by the index.

Competitive Edge

SPVUu2019s competitive edge lies in its volatility-weighted approach to the S&P 500, differentiating it from standard market-cap-weighted ETFs. Its strategy seeks to reduce downside risk and potentially improve risk-adjusted returns over the long term. Victory Capitalu2019s expertise in quantitative investing further strengthens its position. The rules-based approach provides transparency and consistency in the investment process.

Volatility

The ETF's volatility should be lower than the S&P 500 due to its low-volatility weighting strategy; analyze standard deviation and beta to confirm this.

Market Risk

The ETF is still subject to market risk as it invests in equities. Sector concentration and deviations from the S&P 500's sector weights can also introduce specific risks.

Ideal Investor Profile

The ideal investor is risk-averse and seeks to reduce portfolio volatility while maintaining exposure to the US equity market.

Market Risk

SPVU is suitable for long-term investors and those seeking a less volatile investment option.

VictoryShares US 500 Enhanced Volatility Wtd ETF (SPVU) offers a unique approach to S&P 500 investing by weighting stocks based on their volatility, aiming for enhanced risk-adjusted returns. Its low-volatility focus makes it attractive to risk-averse investors seeking stability. However, potential investors should assess its historical performance and trading costs. The ETF is suitable for long-term investors looking for reduced volatility in their portfolios.

Data Sources:

• Victory Capital Website
• ETF.com
• Morningstar
• Yahoo Finance
• Bloomberg

Disclaimers:

The data provided is for informational purposes only and should not be considered investment advice. Past performance is not indicative of future results. Consult with a qualified financial advisor before making any investment decisions.