VictoryShares US Multi-Factor Minimum Volatility (VSMV)

Overview

The VictoryShares US Multi-Factor Minimum Volatility ETF (VSMV) seeks to provide investment results that track the performance of the Nasdaq Victory US Multi-Factor Minimum Volatility Index. The fund invests in a broad range of U.S. stocks, employing a multi-factor approach to minimize volatility while considering value, quality, and momentum factors.

Reputation and Reliability

Victory Capital Management is a reputable asset manager with a history of offering various investment strategies.

Management Expertise

Victory Capital's investment team has expertise in quantitative analysis and portfolio construction, focused on delivering risk-adjusted returns.

Goal

The ETF aims 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 rules-based methodology to select and weight stocks based on volatility, value, quality, and momentum factors.

Composition The ETF primarily holds U.S. stocks, with a focus on large- and mid-capitalization companies. Holdings are diversified across various sectors to reduce overall portfolio risk.

Market Share: VSMV's market share in the low volatility ETF sector is moderate, with several larger competitors.

Total Net Assets (AUM): 1265000000

Key Competitors

• Invesco S&P 500 Low Volatility ETF (SPLV)
• iShares MSCI USA Min Vol Factor ETF (USMV)
• Nuveen ESG Low Carbon Equity ETF (NULC)

Competitive Landscape

The low volatility ETF market is competitive, with several large players dominating market share. VSMV distinguishes itself through its multi-factor approach, incorporating value, quality, and momentum in addition to volatility. However, SPLV and USMV have significantly higher AUM and trading volume. VSMVu2019s lower expense ratio might attract investors, but overall, it contends in a mature market segment with established alternatives.

Historical Performance: VSMV's performance has generally been competitive with other low volatility ETFs, although past performance is not indicative of future results.

Benchmark Comparison: The ETF's performance is tracked against the Nasdaq Victory US Multi-Factor Minimum Volatility Index, and deviations may occur due to tracking error and fund expenses.

Expense Ratio: 0.27

Average Trading Volume

The ETF's average daily trading volume is moderate, providing sufficient liquidity for most investors.

Bid-Ask Spread

The bid-ask spread is generally tight, indicating reasonable trading costs.

Market Environment Factors

Economic indicators such as interest rates, inflation, and economic growth can impact the performance of VSMV. Sector-specific performance and overall market volatility are also key drivers.

Growth Trajectory

VSMV's growth trajectory is dependent on investor demand for low volatility strategies and its ability to attract assets in a competitive market. Changes to the underlying index methodology could also affect its future performance.

Competitive Edge

VSMV's multi-factor approach, which considers value, quality, and momentum in addition to volatility, sets it apart from some competitors. This can potentially lead to better risk-adjusted returns over the long term. The fund's relatively low expense ratio is also a competitive advantage. However, its AUM is smaller than some of its larger competitors, which could affect trading liquidity.

Volatility

VSMV is designed to exhibit lower volatility than the broader market, but it is still subject to market risk and can experience price fluctuations.

Market Risk

The underlying assets are primarily U.S. stocks, which are subject to market risk, including economic downturns, geopolitical events, and changes in investor sentiment.

Ideal Investor Profile

VSMV is suitable for investors seeking lower volatility exposure to the U.S. equity market and who prioritize capital preservation. It can be a good option for those looking to reduce portfolio risk.

Market Risk

VSMV is best suited for long-term investors who want to dampen market volatility and are comfortable with moderate returns. It might also appeal to those near retirement or risk-averse investors.

The VictoryShares US Multi-Factor Minimum Volatility ETF (VSMV) aims to provide lower volatility exposure to the U.S. equity market through a multi-factor approach. Its investment strategy incorporates value, quality, and momentum factors in addition to minimizing volatility. VSMV may be suitable for risk-averse investors seeking capital preservation and long-term growth. However, investors should consider its moderate trading volume, expense ratio, and competition within the low volatility ETF market segment.

Data Sources:

• Victory Capital Management, ETF.com, Bloomberg, Yahoo Finance

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. Investors should consult with a qualified financial advisor before making any investment decisions.