VictoryShares US Multi-Factor Minimum Volatility (VSMV)

Overview

The VictoryShares US Multi-Factor Minimum Volatility ETF (VSMV) seeks to provide investment results that closely correspond, before fees and expenses, to the performance of the Nasdaq Victory US Multi-Factor Minimum Volatility Index. It focuses on U.S. equities while minimizing volatility using factors like value, quality, and momentum.

Reputation and Reliability

Victory Capital has a solid reputation as an asset manager, providing a range of investment solutions. They are known for their rules-based and factor-based ETF offerings.

Management Expertise

Victory Capital's management team has considerable experience in quantitative investing and factor-based strategies, which are crucial for managing a minimum volatility ETF.

Goal

To provide investment results that closely correspond, before fees and expenses, to the performance of the Nasdaq Victory US Multi-Factor Minimum Volatility Index.

Investment Approach and Strategy

Strategy: The ETF tracks the Nasdaq Victory US Multi-Factor Minimum Volatility Index, which employs a multi-factor model to select and weight stocks to minimize portfolio volatility.

Composition The ETF holds a diversified portfolio of U.S. equities selected based on factors such as value, quality, and momentum, with the aim of minimizing overall portfolio volatility.

Market Share: VSMV's market share within the low volatility ETF space is moderate, facing competition from larger, more established funds.

Total Net Assets (AUM): 1373333910

Key Competitors

• SPLV
• USMV
• XSLV

Competitive Landscape

The low volatility ETF market is competitive, with several large players. VSMV differentiates itself by using a multi-factor approach to minimize volatility, potentially offering a different risk-return profile than competitors that rely solely on volatility metrics. This multi-factor approach can be an advantage, but also may add complexity that some investors might find less appealing.

Historical Performance: Historical performance varies depending on the time frame. Reviewing the ETF's annual returns, as well as 3, 5, and 10-year average annual returns is necessary.

Benchmark Comparison: Comparing VSMV's performance against the S&P 500 and other low volatility ETFs is crucial to assessing its effectiveness in minimizing volatility and delivering returns.

Expense Ratio: 0.3

Average Trading Volume

The average trading volume for VSMV is moderate, generally sufficient for most investors but lower than more popular ETFs in the space.

Bid-Ask Spread

The bid-ask spread for VSMV is typically reasonable, though it can widen during periods of market volatility or lower trading volume.

Market Environment Factors

VSMV's performance is influenced by factors such as interest rates, economic growth, and market sentiment, particularly concerning sectors favored by its multi-factor model.

Growth Trajectory

VSMV's growth depends on investor demand for low volatility strategies and its ability to consistently deliver competitive risk-adjusted returns. Changes to the underlying index methodology or holdings could impact its future performance.

Competitive Edge

VSMV's competitive advantage lies in its multi-factor approach to minimizing volatility, incorporating value, quality, and momentum factors. This differentiates it from simpler volatility-weighted ETFs. Its index is rebalanced quarterly to optimize the factor exposures. This strategy can potentially enhance risk-adjusted returns, but it also adds complexity.

Volatility

VSMV exhibits lower historical volatility compared to the broader market, consistent with its investment objective.

Market Risk

VSMV is still subject to market risk, meaning that the value of its holdings can decline during market downturns. Its sector allocation and factor exposures can also introduce specific risks related to those sectors and factors.

Ideal Investor Profile

The ideal investor is risk-averse and seeks lower volatility exposure to the U.S. equity market. Investors looking for downside protection and stable returns may find VSMV appealing.

Market Risk

VSMV is suitable for long-term investors seeking a core equity holding with reduced volatility, and for those who believe in factor-based investing.

VictoryShares US Multi-Factor Minimum Volatility ETF (VSMV) offers a low volatility strategy using a multi-factor model to select stocks. It aims to track the Nasdaq Victory US Multi-Factor Minimum Volatility Index. While the ETF seeks to reduce volatility, it is not risk free. VSMV is suitable for investors seeking a core equity holding with reduced volatility and long-term growth potential.

Data Sources:

• Victory Capital Website
• ETF.com
• Morningstar

Disclaimers:

The data and analysis provided are for informational purposes only and should not be considered investment advice. Past performance is not indicative of future results. Market share data is approximate and may vary depending on the source and calculation method.