VictoryShares Dividend Accelerator ETF's Average Process Pillar and People Pillar ratings result in a Morningstar Medalist Rating of Neutral. The portfolio maintains a cost advantage over competitors, priced within the least expensive fee quintile among peers.  

 The strategy earns an Average Process Pillar rating. Independent of the rating, analysis of the strategy's portfolio shows it has maintained a significant underweight position in volatility exposure and an overweight in liquidity exposure compared with category peers. Low volatility exposure is attributed to stocks with a lower standard deviation of returns. And a high liquidity exposure is rooted in stocks with higher trading volumes, lending managers more flexibility. The strategy’s management team earns an Average People Pillar rating. The strategy's parent organization earns the firm an Average Parent Pillar rating. People Pillar and Parent Pillar ratings for this strategy are indirectly assigned by a Morningstar analyst rather than algorithmically derived. Please see the notes following each pillar section for more details. The details of assigning methods can be found in each pillar section.

Analyst Rating

Altria

Kimberly-Clark

Hormel Foods

Duke Energy

Con Ed

T. Rowe Price Group

Chevron

Medtronic

Franklin Resources

Morningstar's evaluation of this security's process aims to determine the likelihood that it will outperform its Morningstar Category index on a risk-adjusted basis over the long term. VictoryShares Dividend Accelerator ETF earns an Average Process Pillar rating. 

The leading factor in the rating is that this fund tracks an index. Historical data, such as Morningstar's Active/Passive Barometer, finds that passively managed funds have generally outperformed their active counterparts, especially over longer time horizons. Low costs across its parent firm's funds, whose fees, on average, rank in the middle quintile of their respective category, also influence the rating. The pattern of low fees at the firm suggests that it is focused on delivering strong results for investors. Lastly, the process is limited by the fund's weak long-term risk-adjusted performance. This can be seen in its five-year alpha calculated relative to the category index, which suggests that the process has struggled over that period.

 This strategy tends to hold smaller, more undervalued companies than its average peer in the Large Blend Morningstar Category. Analyzing additional factors, this strategy has consistently exhibited a tilt toward low-volatility stocks or companies whose shares have a history of lower standard deviation of returns, compared with its Morningstar Category peers in recent years. Such holdings can limit a strategy's downside, but cause it to lag in bull markets. In the latest month, the strategy was also less exposed to the Volatility factor compared with Morningstar Category peers. Given the high trading volume of holdings, this strategy has been exposed to liquid assets during these years. More-liquid assets contribute to more-flexible exit strategies without price changes and tend to be a ballast during market selloffs. For example, if the portfolio faces successive redemptions in a short period of time, it will be less likely to suffer from a significant loss. Compared with category peers, the strategy also had more exposure to the Liquidity factor in the most recent month. In addition, this strategy has had a bias away from momentum stocks during these years. Momentum tends to be a powerful force in asset markets, as stocks that have done well recently usually continue to do so in the short term. As top performers change, this can sometimes be hard to capture without higher trading costs. In recent months, the strategy also had less Momentum factor exposure than its peers. More information on a fund and its respective category's factor exposure can be found in the Factor Profile module within the Portfolio section. 

 The portfolio is overweight in consumer defensive and industrials relative to the category average by 18.6 and 15.7 percentage points, respectively. The sectors with low exposure compared to category peers are technology and communication services, underweight the average by 15.3 and 8.2 percentage points of assets, respectively. The strategy owns 76 securities and is diversified among those holdings. In its most recent portfolio, 26.2% of the strategy's assets were concentrated in the top 10 fund holdings, as opposed to the category average's 49.5%. And finally, in terms of portfolio turnover, this fund trades more frequently than its average peer, potentially racking up additional expenses for investors and creating a drag on performance.

Average

Process

Victory Capital’s team is valuable but does not stand out as one of the industry's best, warranting an Average People Pillar rating. The fund takes a solo manager approach, with Mannik Dhillon as the only listed manager at the helm, who brings 10 years of portfolio management experience to the table. They manage a total of 17 strategies, with mixed prospects. The asset-weighted average Morningstar Medalist Rating across the strategies is Neutral. This means, in aggregate, they are not positioned to deliver positive alpha relative to the category median. With only one manager listed on the strategy, the passive strategy is vulnerable to key-person risk. 

 Note: This People Pillar rating is indirectly assigned by an analyst. Morningstar analysts evaluate the People Pillar for passive products at the brand level and may also differentiate by asset class. There is at least one other passive strategy at the firm that is covered by a Morningstar analyst, so the People Pillar rating of the fund is inherited from the rating that the Morningstar analyst assigned to investment vehicles under the same brand name.

People

As Victory Capital Management expands a roster of investment teams that runs the gamut,  it retains an Average Parent rating.

Victory operates a multiaffiliate model. It centralizes operations, compliance, and distribution while giving its 12 franchises investment autonomy. The franchise lineup had long been composed of those primarily focused on small/mid-cap equities. But the 2019 acquisition of fixed-income shop USAA Investments (which was rebranded as Victory Income Investors in April 2023) represented a significant change to that model. The firm has continued to broaden from there, acquiring three new franchises since the start of 2021: THB Asset Management (an environmental, social, and governance specialist), New Energy Capital (an alternatives manager), and WestEnd Advisors (a third-party model strategist). Overall, Victory is as big and diverse as ever: Its assets under management as of March 2023 was $157.6 billion, much higher than the $52.8 billion level as of December 2018.

Victory’s bright spots include Sycamore Capital and Trivalent Investments, which boast strong investment cultures, good levels of manager ownership, and solid capacity management processes. But there are questions elsewhere. Victory Capital Solutions has made some questionable subadvisor changes and dubious exchange-traded fund launches in recent years; Victory Income Investors has seen several departures since the 2019 acquisition and will absorb another franchise, Incore, in September 2023.

Parent

Victoryshares Dividend Accelerator ETF

VSDA tracks an index of dividend-paying US large- and mid-cap stocks with a high likelihood of future dividend growth.

VictoryShares Dividend Accelerator ETF rivals Schwab U.S. Dividend Equity ETF and iShares Core Dividend Growth ETF in the space of uninterrupted double-digit dividend growth ETFs.

VSDA: Uninterrupted Double-Digit Dividend Growth ETF Alternative

VictoryShares Dividend Accelerator ETF (VSDA) focuses on large-cap stocks with a history of dividend growth. High dividend growth is a high quality factor that tends to outperform during bear markets. However, as a single factor ETF, the VSDA ETF may experience volatile relative performance, making it difficult to recommend as a long-term buy.

VSDA: Focuses On High Quality Dividend Growth Factor

Passively managed VSDA capitalizes on promising U.S. dividend growth stories. It offers exposure to 75 dividend stocks, predominantly from the industrial (25.5%), consumer staples (25%), and financial (10.8%) sectors. The portfolio has a weighted-average EY of about 5.1% and a market cap of $173 billion. VSDA's valuation overall does not appeal to me, while I like its quality.

VSDA Is Still Only A Hold Due To Valuation Nuances Despite Robust Quality

VictoryShares Dividend Accelerator ETF uses a regression-based screening mechanism to select dividend growth stocks. We compare VSDA to the largest alternative in the US dividend growth ETF space. Although we are not entirely moved by this product's qualities, we highlight a few reasons why it may do well at this juncture.

VSDA ETF: Yes And No

VictoryShares Dividend Accelerator ETF identifies companies with a higher probability of future dividend growth. The VSDA ETF is heavily invested in industrials and consumer staples sectors. VSDA has delivered a strong dividend growth rate since 2018, but its total return is average among its peers.

VSDA: Delivering Superior Dividend Growth, But Average Return

VSDA selects 75 stocks with excellent dividend growth track records. Monthly payments accelerate dividend growth and it's a suitable alternative to the ProShares S&P 500 Dividend Aristocrats ETF. VSDA's 3Y and 5Y dividend growth rates are 21% and 14%. The 1.90% trailing dividend yield isn't enticing today, but the future yield on cost should be substantial.

VSDA: This Dividend Growth ETF Beats NOBL, But What About VIG?

VSDA is a dividend growth ETF holding 74 U.S. large and mid-cap stocks. It is overweight in industrials but keeps some balance between cyclical and defensive sectors.

VSDA: Dividend Growth ETF Beating Its Peers

VSDA tracks a propriety Index, selecting 75 U.S. stocks with sustainable dividend growth and stable earnings patterns. Annual fees are 0.35% and the ETF has $253 million in AUM. The Index considers a variety of common-sense screens, including dividend growth and consistency, return on equity, price-earnings ratio, and net income stability.

VSDA: Is This Dividend Accelerator ETF True To Form?

VSDA is a dividend growth fund in U.S. large and mid-cap companies. Its heaviest sector is industrials.

VSDA: An Attractive Dividend Growth ETF

With growth stocks wilting this year, plenty of value exchange traded funds are strutting their stuff. Same goes for dividend ETFs.

VSDA: Accelerant for Dividend Growth, Value

VSDA is a concentrated portfolio of carefully selected U.S. large- and mid-cap dividend-paying stocks that have specific quality characteristics pointing to their potential to continue increasing DPS going forward. There are a few issues worthy of concern. First, VSDA is one of the most overvalued dividend ETFs amongst those I cover.

VSDA: Arguably Winning Strategy Marred By Lofty Valuation

The consumer price index (CPI) came in hot this week, with inflation numbers for October hitting their highest in 30 years at 6.2% over last year. Markets responded with falling stocks and rising bond yields, as well as a mass sell-off in tech stocks, but seem to have course corrected for now, reports CNBC.

Markets Digest Inflation News, Estimate Rate Raises

iShares Core Dividend Growth ETF

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The appeal for dividend-focused ETFs is in vogue with bulls and bears playing tug-of-war lately.

Dividend ETFs Scaling New Peaks on Bull-Bear Play

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When choosing a dividend growth ETF, dividends aren't the only thing that matter. The cost to hold the ETF over time is an important consideration.

Spare No Expense Ratio: The 5 Cheapest Dividend Growth ETFs

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These dividend ETFs are hovering at a record high. Most of these ETFs offer yields higher than the benchmark U.S.-treasury yield and some possess stocks that have a strong history of hiking dividends regularly.

5 Dividend ETFs Hovering at Record High

Dividend growth is once again on an impressive trajectory. That's the good news, but it also means advisors should be selective with their payout growth strategies.

Nasdaq's NQVDIV: A Compelling Index for Dividend Growth

The VictoryShares Dividend Accelerator ETF (VSDA) is a strong option for seasoned dividend investors. The fund debuted in April 2017 and follows the Nasdaq Victory Dividend Accelerator Index (NQVDIV), which Victory Capital developed in partnership with Nasdaq.

For Dividend Growth, Add Some Octane with ‘VSDA'

Dividend growth is showing signs of perking up. Investors can add some fuel to the fire with the VictoryShares Dividend Accelerator ETF (VSDA).

Accelerate Your Dividend Growth Potential with Nasdaq's ‘VSDA' ETF

In a challenging environment for dividend stocks, payout growth remains a viable point of emphasis for income investors. The VictoryShares Dividend Accelerator ETF (VSDA) takes a useful approach to steady payout growth.

A Victorious Approach to Dividend Growth

VictoryShares US Multi-Factor Minimum Volatility ETF

President of VictoryShares and Solutions, Mannik S. Dhillon, spoke with ETF Trends about the dividend growers’ space in 2019, and how to prepare for what’s to come in 2020.

VictoryShares On Dividend Growers, Going Into 2020

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Several studies show that we may hit a slowdown or recession in the medium term. Investors can follow these ETF tactics if that becomes the case.

Is Recession Knocking at the Door? ETF Strategies to Follow

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Global economic slowdown is expected in 2020. Investors can target these ETF strategies.

Economic Slowdown in 2020? ETF Strategies to Help You

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Bond yields are falling, but these dividend ETFs can help investors bolster their income profiles for the long term.

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We highlight some dividend ETFs that have become immensely popular this year and have been hitting all-time highs.

Red Hot Dividend ETFs of 2019

This dividend accelerator ETF hit a new 52-week high. Are more gains in store for this ETF?

News for Victoryshares Dividend Accelerator ETF ETF (VSDA)