New Strategic Beta ETFs Provide An Alternative
Approach For Investing in Non-U.S. Markets
Victory Capital today announced that it has launched two new
Exchange Traded Funds (ETFs), which began trading on the Nasdaq
Stock Market® on August 20, 2015. The new ETFs are managed by
Victory Capital’s investment franchise, Compass Efficient Model
Portfolios (“Compass EMP”). Victory Capital recently completed the
acquisition of the business of Compass EMP, a strategic beta
manager based in Brentwood, TN.
“The Compass EMP methodology can provide advisors and their
clients with a more effective way to achieve broad market exposure
than traditional market-cap weighted indexes,” said Stephen
Hammers, Chief Investment Officer for Compass EMP. “We are very
excited to expand our existing ETF line-up to include two funds
that may offer a tax efficient solution for investors seeking broad
diversification outside of the U.S.”
The new ETFs track the CEMP Volatility Weighted Indexes. The
CEMP Indexes seek to improve an investor’s ability to outperform
traditional indexing strategies through an alternative approach
that combines fundamental criteria with broad market volatility
weighting of individual securities. The newly launched ETFs
are:
- Compass EMP International 500
Volatility Weighted Index ETF (CIL)
- Compass EMP International High Dividend
100 Volatility Weighted Index ETF (CID)
Today’s launch follows the launch in July 2015 of three domestic
equity ETFs managed by Compass EMP, including Compass EMP US Small
Cap 500 Volatility Weighted Index ETF (CSA), Compass EMP US Large
Cap High Dividend 100 Volatility Weighted Index ETF (CDL), and
Compass EMP US Small Cap High Dividend 100 Volatility Weighted
Index ETF (CSB). The ETF platform managed by Compass EMP now
includes 10 funds, all using Compass EMP’s strategic beta indexing
approach.
ABOUT COMPASS EMP
Compass EMP, a Victory Capital investment franchise, provides
rules-based investment strategies that combine fundamental criteria
with volatility weighting to seek to improve an investor’s ability
to outperform traditional indexing strategies.
Victory Capital currently offers 10 ETFs and 16 mutual funds
managed by Compass EMP. For more information, please visit
www.compassempetf.com.
ABOUT VICTORY CAPITAL
Victory Capital is a multi-boutique asset management firm,
headquartered in Cleveland, OH. As of June 30, 2015, the firm had
approximately $35.7 billion in assets under management and
advisement.
Victory Capital is comprised of nine autonomous investment
franchises, each with an independent culture and investment
approach. The franchises are supported by a robust distribution and
operational platform, allowing them to focus solely on investment
management.
Victory Capital provides investment advisory services to
institutional clients including corporations, non-profits, public
funds, Taft-Hartley and sub-advisory clients through separate
accounts and commingled funds. Through its intermediary channel,
Victory Capital also offers retail and retirement clients mutual
funds and ETFs as well as separately managed accounts through wrap
fee programs and access to its investment models through unified
managed accounts. For more information, please visit
www.vcm.com.
Investments involve risk including possible loss of principal.
ETFs have the same risks as the underlying securities traded on the
exchange throughout the day. Redemptions are limited and often
commissions are charged on each trade, and ETFs may trade at a
premium or discount to their net asset value. The Funds are new
exchange traded funds (“ETFs”) and have a limited history of
operations for investors to evaluate. The Funds are not actively
managed and do not, therefore, seek returns in excess of their
respective Index. The Funds’ returns may not match the returns of
their respective Index for a number of reasons, including: the Fund
incurs operating expenses not applicable to the Index and incurs
costs in buying and selling securities; the Fund may not be fully
invested at times; differences in the valuation of securities and
differences between the Fund’s portfolio and the Index resulting
from legal restrictions, cost, or liquidity constraints. The
Compass EMP US Small Cap 500 Volatility Weighted Index ETF, Compass
EMP US Small Cap High Dividend 100 Volatility Weighted Index ETF,
and Compass EMP U.S. Discovery 500 Enhanced Volatility Weighted
Index ETF may invest in Small Cap companies. The earnings and
prospects of smaller-sized companies are more volatile than larger
companies. Small-sized companies may have limited markets, product
lines, or financial resources and lack management experience and
may experience higher failure rates than larger companies. The
Compass EMP U.S. 500 Volatility Weighted Index ETF and the Compass
EMP U.S. 500 Enhanced Volatility Weighted Index ETF may invest in
medium cap companies which involves additional risks such as
limited liquidity and greater volatility than large cap companies.
Compass EMP U.S. Discovery 500 Enhanced Volatility Weighted Index
ETF, Compass EMP U.S. 500 Enhanced Volatility Weighted Index ETF,
Compass EMP Developed 500 Enhanced Volatility Weighted Index ETF,
and the Compass EMP U.S. EQ Income 100 Enhanced Volatility weighted
Index ETFs may invest, directly or indirectly, in “junk bonds”.
Such securities are speculative investments that carry greater
risks than higher quality debt securities. In general the price of
a fixed income security falls when interest rates rise. The Compass
EMP US Large Cap High Dividend 100 Volatility Weighted Index ETF,
Compass EMP US Small Cap High Dividend 100 Volatility Weighted
Index ETF, Compass EMP International High Dividend 100 Volatility
Weighted Index ETF high dividend strategies may not be successful.
Dividend paying stocks may fall out of favor relative to the
overall market. The Compass EMP Developed 500 Enhanced Volatility
Weighted Index may invest in securities included in, or
representative of securities included in, the index, regardless of
their investment merits. Compass EMP International High Dividend
100 Volatility Weighted Index ETF and Compass EMP International 500
Volatility Weighted Index ETF are subject to the special risks
associated with investments in foreign markets which may include
less liquidity, greater volatility, less developed or less
efficient trading markets, lack of comprehensive company
information, political instability and differing auditing and legal
standards. The Fund’s net asset value could decline as a result of
changes in the exchange rates between foreign currencies and the US
dollar. Additionally, certain foreign countries may impose
restrictions on the ability of issues of foreign securities to make
payment of principal and interest to investors located outside the
country, due to blockage of foreign currency exchanges or
otherwise.
Strategic beta refers to an investment style where the manager
passively follows an index designed to take advantage of perceived
systematic biases or inefficiencies in the market. Strategic beta
strategies attempt to deliver a better risk and return trade-off
than conventional market cap weighted indices by using alternative
weighting schemes based on measures such as volatility.
Please consider the Funds’ investment objectives, risks,
charges, and expenses carefully before investing. This and other
important information about the Compass EMP Funds can be found in
the Funds’ current prospectus. Please read the prospectus carefully
before investing.
For Compass EMP Funds ETFs, the current prospectus may be
obtained by calling your Financial Advisor or shareholder services
at 1-866-376-7890.
Nothing contained in this communication constitutes tax, legal,
or investment advice. Investors must consult their tax advisor or
legal counsel for advice and information concerning their
particular situation.
Compass EMP Funds ETFs are distributed by Quasar Distributors,
LLC.
Victory Capital Management Inc. is the advisor to the Compass
EMP Funds.
Neither Victory Capital nor Compass Efficient Model Portfolios
are affiliated with Quasar Distributors, LLC.
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version on businesswire.com: http://www.businesswire.com/news/home/20150820005700/en/
Artemis Consulting GroupAmanda Demarest,
512-619-7047amanda@artemisconsultinggroup.com
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