How Core Beliefs Guide USAA's Smart Beta Implementation

Smart beta ETFs are growing in popularity, and as more investors begin to take a look at these alternative strategies, it is important to consider the best ways to incorporate the investments into a diversified portfolio.

On the upcoming webcast Thursday, June 21, Core Values, Core Portfolio Building Blocks, Lance Humphrey, Portfolio Manager for USAA Asset Allocation, and Joe Parker, ETF Capital Markets and Former United States Army Officer, will look at value and momentum factor-based investments and consider some of the best practices when incorporating these alternative strategies into a diversified portfolio.

For instance, through their hands-on experience with investing in ETFs, USAA has stepped out with its own ETF suite, including USAA Core Short-Term Bond ETF (NYSEArca: USTB), USAA Core Intermediate-Term Bond ETF (NYSEArca: UITB), USAA MSCI USA Value Momentum Blend Index ETF (NYSEArca: ULVM), USAA MSCI USA Small Cap Value Momentum Blend Index ETF (NYSEArca: USVM), USAA MSCI International Value Momentum Blend Index ETF (NYSEArca: UIVM) and USAA MSCI Emerging Markets Value Momentum Blend Index ETF (NYSEArca: UEVM).

More Choices With Competitive Costs

The new suite of ETFs is built as core portfolio-building components and allows investors more choices at a competitive cost.

On the fixed-income side, USAA has focused on their “bread and butter,” bringing their credit, taxable income strategies to the ETF space through USTB and UITB. The new actively managed fixed income ETFs incorporate USAA’s decades of experience in Core Bond categories, with the USAA Core Intermediate-Term Bond ETF focusing on high current income without undue risk to principal and the USAA Core Short-Term Bond ETF targeting high current income consistent with preservation of capital.

Meanwhile, the new smart beta lineup focuses on the value and momentum factors, identifying stocks with attractive valuations and positive price momentum and weighting the two factors in such a way to help investors diversify against the risk of individual holdings.

Financial advisors who are interested in learning more about portfolio construction can register for the Thursday, June 21 webcast here.