The Victory CEMP US 500 Enhanced Volatility Wtd Index ETF (CFO - Free Report) was launched on 07/01/2014, and is a passively managed exchange traded fund designed to offer broad exposure to the Large Cap Blend segment of the US equity market.
The fund is sponsored by Victory Capital. It has amassed assets over $997.97 M, making it one of the average sized ETFs attempting to match the Large Cap Blend segment of the US equity market.
Why Large Cap Blend
Large cap companies usually have a market capitalization above $10 billion. Considered a more stable option, large cap companies boast more predictable cash flows and are less volatile than their mid and small cap counterparts.
Blend ETFs are aptly named, since they tend to hold a mix of growth and value stocks, as well as show characteristics of both kinds of equities.
When considering an ETF's total return, expense ratios are an important factor, and cheaper funds can significantly outperform their more expensive counterparts in the long term if all other factors remain equal.
Annual operating expenses for this ETF are 0.35%, putting it on par with most peer products in the space.
It has a 12-month trailing dividend yield of 1.27%.
Sector Exposure and Top Holdings
ETFs offer a diversified exposure and thus minimize single stock risk but it is still important to delve into a fund's holdings before investing. Most ETFs are very transparent products and many disclose their holdings on a daily basis.
This ETF has heaviest allocation to the Industrials sector--about 20.10% of the portfolio. Financials and Consumer Discretionary round out the top three.
Looking at individual holdings, Jpmorgan Us Tr Pl Mmkt (IJTXX) accounts for about 0.55% of total assets, followed by Northrop Grumman Corp. (NOC - Free Report) and Atmos Energy Corp (ATO - Free Report) .
The top 10 holdings account for about 3.67% of total assets under management.
Performance and Risk
CFO seeks to match the performance of the CEMP U.S. Large Cap 500 Long/Cash Volatility Weighted Index before fees and expenses. The CEMP U.S. Large Cap 500 Long/Cash Volatility Weighted Index is an unmanaged index that was created by the Fund?s investment advisor and generally consists of the common stock of the 500 largest companies by market capitalization that have their headquarters in the U.S. and the stock of which trades on U.S. exchanges.
The ETF has added about 4.21% so far this year and was up about 14.45% in the last one year (as of 07/25/2018). In the past 52-week period, it has traded between $43.71 and $51.97.
The ETF has a beta of 0.96 and standard deviation of 12.64% for the trailing three-year period, making it a medium risk choice in the space. With about 500 holdings, it effectively diversifies company-specific risk.
An increasingly popular option among retail and institutional investors, passively managed ETFs offer low costs, transparency, flexibility, and tax efficiency; they are also excellent vehicles for long term investors.
To learn more about this product and other ETFs, screen for products that match your investment objectives and read articles on latest developments in the ETF investing universe, please visit Zacks ETF Center.