Victory Capital has announced that its wholly owned investment adviser, Victory Capital Management, has launched a new active ETF, VictoryShares WestEnd US Sector ETF (MODL).
WestEnd Advisors, a Victory Capital Investment Franchise, has a long history of managing third-party ETF model strategies that are available on many of the largest intermediary distribution platforms. This new product delivers an investment approach that mirrors WestEnd’s existing US Sector Strategy in a single ETF.
“We are incredibly excited to offer this time-tested approach to managing model-based strategies to our clients in an active, transparent ETF wrapper, which provides ease of trading, lower account minimums and tax efficiency, among other benefits,” says Mannik Dhillon, CFA, CAIA, President, VictoryShares and Solutions. “By expanding our suite of available vehicles, we are providing financial advisors the flexibility to choose how they access proven investment capabilities for their clients’ varying needs.”
MODL seeks to achieve favourable returns through active sector selection and avoidance, based on WestEnd’s evaluation of the macroeconomic and market environment. The firm writes that the team’s disciplined approach, developed in 1996 and implemented with third-party ETFs since 2005, combines high-conviction active management with the diversification of investing in passive index-based sector ETFs and active avoidance of select sectors to help mitigate risk.
“We are pleased to broaden investor access to WestEnd’s US Sector Strategy with the launch of this ETF, which employs our existing approach and belief that sector performance is tied directly to the path of economic growth,” says Mike Goldman, Managing Partner for WestEnd said. “In WestEnd’s view, actively allocating to sectors in their economic time and avoiding those facing headwinds can offer the opportunity for outperformance throughout the economic cycle.”
The firm writes that WestEnd’s process starts with an in-depth analysis of the macroeconomic environment to anticipate areas of strength and weakness. Then, the investment team considers each sector’s relative economic sensitivity in conjunction with its macroeconomic outlook in making sector allocation and avoidance decisions. Finally, they use low-cost ETFs from leading US providers to gain their desired sector exposures. The result is a low-turnover portfolio of select sector allocations that WestEnd believes will deliver superior returns given its macroeconomic outlook.
