Launched on 07/01/2014, the VictoryShares US 500 Volatility Wtd ETF (CFA - Free Report) is a passively managed exchange traded fund designed to provide a 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 $619.16 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 typically 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.
Typically holding a combination of both growth and value stocks, blend ETFs also demonstrate qualities seen in value and growth investments.
Expense ratios are an important factor in the return of an ETF and in the long term, cheaper funds can significantly outperform their more expensive counterparts, other things remaining the same.
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 1.28%.
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 20.70% of the portfolio. Financials and Consumer Discretionary round out the top three.
Looking at individual holdings, Ecolab Inc. (ECL - Free Report) accounts for about 0.37% of total assets, followed by Citibank Dollars On Dep (CITIMM) and Duke Energy Corp. (DUK - Free Report) .
The top 10 holdings account for about 3.52% of total assets under management.
Performance and Risk
CFA seeks to match the performance of the CEMP U.S. Large Cap 500 Volatility Weighted Index before fees and expenses. The CEMP U.S. Large Cap 500 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 gained about 5.14% so far this year and was up about 16.39% in the last one year (as of 08/16/2018). In the past 52-week period, it has traded between $43.79 and $51.96.
The ETF has a beta of 0.91 and standard deviation of 12.59% for the trailing three-year period, making it a medium risk choice in the space. With about 495 holdings, it effectively diversifies company-specific risk.
Passively managed ETFs are becoming increasingly popular with institutional as well as retail investors due to their low cost, transparency, flexibility and tax efficiency. They are 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.