Victory Capital Launches ETF Mirroring US Sector Strategy

The fund evaluates the macroeconomic and market environment.

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Reviewed by: Zoya Mirza
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Edited by: Zoya Mirza

Victory Capital Holdings Inc., which manages $147.3 billion in assets, said that its exchange-traded fund unit launched a new ETF focused on “active sector selection.” 

The actively managed VictoryShares WestEnd U.S. Sector ETF (MODL) began trading Wednesday on the Nasdaq Global Market exchange. The price was unchanged at $25.08 with 400,000 shares trading in the afternoon, according to Yahoo Finance data  

The ETF will be managed by Victory’s WestEnd Advisors, and will follow an investment methodology based on WestEnd’s existing U.S. Sector Strategy model, which it says aims to attain favorable returns through “sector selection and avoidance” based on WestEnd’s economic and market evaluation. 

The ETF, with an expense ratio of 0.48%, is comparable to sector rotation funds such as the Main Sector Rotation ETF (SECT), which comes with a higher expense ratio of 0.78%. SECT has declined 19% this year, while gaining 8% over the past five years. 

The fund is “in the cross sections of two growing areas of our industry—model management and ETFs,” Mannik Dhillon, president of VictoryShares and Solutions, said in an email to ETF.com. 

MODL provides exposure to the core U.S. large cap market, with potential for excess returns as the ETF’s portfolio composition changes throughout the economic cycle, depending on which sector is performing the best. 

The fund typically allocates to four to six economic sectors at any given time, with the maximum exposure to a single sector exceeding no more than 35% of the fund’s net assets at the time of purchase. 

Currently, MODL’s portfolio has seven holdings, with the health care and technology sectors comprising 29.20% and 26.42%, respectively.  

 

Contact Zoya Mirza at [email protected] 

Zoya Mirza is a markets reporter at etf.com. Her work has appeared in USA Today, Voice of America, and United Press International, among others. Mirza is a graduate of Northwestern University’s Medill School of Journalism. Her past experiences include editorial work in book publishing and conducting political analysis for NGOs and think tanks. Mirza is a passionate bibliophile and collects vintage postcards from every bookstore she visits in a new city.