VictoryShares’ Dhillon On Applying A New Lens To Strategic Beta

Mannik Dhillon, President, VictoryShares met with Julie Cooling, Founder & CEO, RIA Channel about the firm’s recent partnership with NASDAQ, and how their expertise in active management has translated into success in strategic beta.

Previously self-indexed, the NASDAQ Victory Volatility Weighted Index, made it’s debut this June. “It felt like a natural progression to partner with them on this,” reasoned Dhillon on Victory Shares’ recent partnership with NASDAQ. He also felt that “as a firm, we like to do what we do best, and outsource what others do best.”

CFA and CFO are two of the ETFs that have moved over to the new index.  VictoryShares US 500 Volatility Weighted ETF (CFA) was designed to promote diversification. Dhillon emphasized that although cap weighted indexes have “dominated index flows,” they are not really as diverse as people think. Allocation to a basket of 500 stocks based on their historical risk, really solves the concentration issue, in addition to creating much more solid diversification, explained Dhillon. On the other hand, VictoryShares US 500 Enhanced Volatility Weighted ETF (CFO) deals with the emotional aspect of investing by adding long cash capability to CFA.   Every month the index makes a “rules-based” determination, according to the amount the market has fallen, as to whether it’s gone to cash or not.

In developing new ETFs, VictoryShares seeks to bridge the gap between active and passive investing. Dhillon concluded that applying VictoryShares’ long time expertise in active investments to “rules-based strategic beta” will ultimately give their results a leg up. Because of VictoryShares’ unique perspective, more and more advisors have turned to them for help with portfolio construction, as well as ways to effectively utilize their many products.

Victory Capital is an investment management firm with over $62 billion in assets.