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Should VictoryShares US 500 Enhanced Volatility Wtd ETF (CFO) Be on Your Investing Radar?

Zacks Equity Research
Tilly's (TLYS) closed the most recent trading day at $16.18, moving -0.98% from the previous trading session.

Looking for broad exposure to the Large Cap Blend segment of the US equity market? You should consider the VictoryShares US 500 Enhanced Volatility Wtd ETF (CFO), a passively managed exchange traded fund launched on 07/01/2014.

The fund is sponsored by Victory Capital. It has amassed assets over $887.57 M, making it one of the larger ETFs attempting to match the Large Cap Blend segment of the US equity market.

Why Large Cap Blend

Companies that fall in the large cap category tend to have a market capitalization above $10 billion. Overall, they are usually a stable option, with less risk and more sure-fire cash flows than mid and small cap companies.

Blend ETFs usually hold a mix of growth and value stocks as well as stocks that exhibit both value and growth characteristics.


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 1.15%.

Sector Exposure and Top Holdings

While ETFs offer diversified exposure, which minimizes single stock risk, a deep look into a fund's holdings is a valuable exercise. And, most ETFs are very transparent products that disclose their holdings on a daily basis.

This ETF has heaviest allocation to the Industrials sector--about 20.60% 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 0.39% of total assets, followed by Ecolab Inc. (ECL) and Atmos Energy Corp (ATO).

The top 10 holdings account for about 3.44% 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 gained about 3.73% so far this year and was up about 16.30% in the last one year (as of 06/07/2018). 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 12.75% for the trailing three-year period, making it a medium risk choice in the space. With about 503 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.

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V-SHRS US5 EVWI (CFO): ETF Research Reports
Atmos Energy Corporation (ATO) : Free Stock Analysis Report
Ecolab Inc. (ECL) : Free Stock Analysis Report
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