If you're interested in broad exposure to the Large Cap Blend segment of the US equity market, look no further than 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 $846.21 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 find themselves in the large cap category 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 1.21%.
Sector Exposure and Top Holdings
It is important to delve into an ETF's holdings before investing despite the many upsides to these kinds of funds like diversified exposure, which minimizes single stock risk. 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 20.40% of the portfolio. Financials and Consumer Discretionary round out the top three.
Looking at individual holdings, Ecolab Inc. (ECL) accounts for about 0.38% of total assets, followed by Duke Energy Corp. (DUK) and Xcel Energy Inc. (XEL).
The top 10 holdings account for about 3.42% 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 lost about -1.14% so far this year and was up about 13.07% in the last one year (as of 05/04/2018). In the past 52-week period, it has traded between $42.45 and $51.97.
The ETF has a beta of 0.96 and standard deviation of 12.74% for the trailing three-year period, making it a medium risk choice in the space. With about 504 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.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Xcel Energy Inc. (XEL) : Free Stock Analysis Report
Duke Energy Corporation (DUK) : Free Stock Analysis Report
Ecolab Inc. (ECL) : Free Stock Analysis Report
V-SHRS US5 EVWI (CFO): ETF Research Reports
To read this article on Zacks.com click here.
Zacks Investment Research