VictoryShares US Value Momentum ETF (ULVM)

ULVM is a domestic counterpart to VictoryShares’ international value-momentum strategies, applied to U.S.-listed stocks. The fund tracks an index that screens the universe of large-cap and mid-cap equities for two overlapping characteristics: low price relative to earnings or book value (value) and positive price momentum over a lookback period (momentum). The result is a narrower basket than the broad U.S. market — fewer stocks, but stocks that meet both criteria. The index is rebalanced on a regular schedule to refresh both the value scores and momentum readings.

The logic behind combining these factors within a domestic strategy mirrors the international version: value and momentum have historically operated on different return drivers and have sometimes cushioned each other’s downturns. A stock can be cheap without yet moving upward; value investors in those holdings suffer if the market refuses to recognize the bargain. A stock can be rising without being cheap; momentum investors holding at high valuations suffer when the trend reverses. The hybrid approach seeks to own stocks that are trending in the right direction and are reasonably priced, in theory reducing the risk that either factor alone would deliver.

Housed in a conventional ETF structure, ULVM trades freely on an exchange during market hours. The fund is not leveraged — it delivers one unit of upside or downside for each unit of movement in its holdings — and it is not inverse, so it does not perform better when markets fall. The expense ratio reflects the cost of the factor-screening methodology but is modest compared to the fees active U.S. equity managers charge. The fund distributes dividends received from its holdings and any capital gains realized during index rebalancing or holdings adjustments; outside a tax-deferred account, the factor rebalancing can generate annual taxable events.

The real challenge in owning ULVM is understanding that factor performance cycles. Value investing has gone through long, painful periods of underperformance versus growth; momentum has crashed in sudden reversals. Neither factor is reliable across all market conditions. Over sufficiently long periods, academic research suggests both have added returns, but “sufficiently long” can mean decades, and the real-world path is volatile and unpredictable. A portfolio holding ULVM should not expect it to beat a simple broad-market index fund consistently — some years it will, some years it will lag significantly. The factor combination attempts to provide a smoother ride, but smoothness is not guaranteed.

Investors using ULVM should view it as a potential building block within a diversified portfolio rather than as a complete domestic equity solution. It works well for those with higher risk tolerance and a long time horizon who believe that value and momentum are genuine sources of return worth harvesting. It is less suitable for investors seeking simple, low-cost broad-market exposure — a total-market index fund would be cheaper and less concentrated. Monitoring both the fund’s composition and the performance of its underlying factors relative to the broad market is essential to understanding whether the strategy continues to merit a place in a portfolio.