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 $1.10 B, 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
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.
Cost is an important factor in selecting the right ETF, and cheaper funds can significantly outperform their more expensive counterparts if all other fundamentals are 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 1.18%.
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 20.80% of the portfolio. Financials and Consumer Discretionary round out the top three.
Looking at individual holdings, Jack Henry & Associates (JKHY) accounts for about 0.38% of total assets, followed by Ecolab Inc. (ECL) and Bright Horizons Family So (BFAM).
The top 10 holdings account for about 3.57% 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 7.72% so far this year and was up about 19.06% in the last one year (as of 09/11/2018). In the past 52-week period, it has traded between $44.79 and $52.39.
The ETF has a beta of 0.95 and standard deviation of 11.78% for the trailing three-year period, making it a medium risk choice in the space. With about 493 holdings, it effectively diversifies company-specific risk.
Retail and institutional investors increasingly turn to passively managed ETFs because they offer low costs, transparency, flexibility, and tax efficiency; these kind of funds 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
Ecolab Inc. (ECL) : Free Stock Analysis Report
Bright Horizons Family Solutions Inc. (BFAM) : Free Stock Analysis Report
Jack Henry & Associates, Inc. (JKHY) : Free Stock Analysis Report
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