An Effective Approach to Reducing Volatility

CFA and CFO ranked in the top 10% of 1,233 qualified Large Blend funds over three years as of July 31, 2017, while CDC ranked in the top 1% of the 1,100 qualified Large Value funds for that same period.

CFA offers a different approach to U.S. broad market exposure. Investors embracing cap-weighted S&P 500 ETFs are not always getting the diversity they think they are. For example, the 50 largest S&P 500 stocks account for about half the index’s weight. This year, the index’s top 10 holdings account for about a third of its performance.

Related: How to Determine if Smart Beta ETFs Fit in Your Portfolio

CFA has a weighted average market value of $45.8 billion compared to $180.5 billion on the S&P 500, according to VictoryShares data. CFA also sports superior earnings growth metrics compared to the S&P 500.

The VictoryShares ETF is overweight the consumer discretionary, financial services and industrial sectors relative to the S&P 500 while being underweight technology and healthcare. At the end of the second quarter, CFA’s holdings ranged in weights from 0.08% to 0.38%.

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