(USVM) VictoryShares US Small Mid - Ratings and Ratios

The VictoryShares US Small Mid Cap Value Momentum ETF (NASDAQ: USVM) is designed to track the performance of small- and mid-capitalization U.S. stocks that exhibit both value and momentum characteristics. Under normal market conditions, the fund invests at least 80% of its net assets in securities included in its underlying index. The index is derived from the Nasdaq US 1300 Small Mid Cap Index and selects companies with higher exposure to value and momentum factors. This approach aims to balance the benefits of value investing, which focuses on undervalued stocks, and momentum investing, which emphasizes stocks with strong price trends. The fund also seeks to maintain lower realized volatility and moderate index turnover compared to traditional capitalization-weighted indexes.

The ETFs underlying index employs a rules-based methodology to identify small- and mid-cap companies with strong value and momentum profiles. Value is determined by metrics such as price-to-earnings ratio, price-to-book ratio, and dividend yield, while momentum is assessed based on factors like price performance and earnings momentum. The funds construction process also incorporates measures to reduce turnover and volatility, making it more stable compared to similar strategies that may experience higher trading activity and market sensitivity.