Compass EMP Launches Two ETFs
August 20, 2015
New Strategic Beta ETFs Provide An Alternative Approach
For Investing in Non-U.S. Markets
Cleveland, OH, August 20, 2015 – Victory Capital today announced that it has launched two new Exchange Traded Funds (ETFs), which began trading on the Nasdaq Stock Market® on August 20, 2015. The new ETFs are managed by Victory Capital’s investment franchise, Compass Efficient Model Portfolios (“Compass EMP”). Victory Capital recently completed the acquisition of the business of Compass EMP, a strategic beta manager based in Brentwood, TN.
“The Compass EMP methodology can provide advisors and their clients with a more effective way to achieve broad market exposure than traditional market-cap weighted indexes,” said Stephen Hammers, Chief Investment Officer for Compass EMP. “We are very excited to expand our existing ETF line-up to include two funds that may offer a tax efficient solution for investors seeking broad diversification outside of the U.S.”
The new ETFs track the CEMP Volatility Weighted Indexes. The CEMP Indexes seek to improve an investor’s ability to outperform traditional indexing strategies through an alternative approach that combines fundamental criteria with broad market volatility weighting of individual securities. The newly launched ETFs are:
Today’s launch follows the launch in July 2015 of three domestic equity ETFs managed by Compass EMP, including Compass EMP US Small Cap 500 Volatility Weighted Index ETF (CSA), Compass EMP US Large Cap High Dividend 100 Volatility Weighted Index ETF (CDL), and Compass EMP US Small Cap High Dividend 100 Volatility Weighted Index ETF (CSB). The ETF platform managed by Compass EMP now includes 10 funds, all using Compass EMP’s strategic beta indexing approach.
ABOUT COMPASS EMP
Compass EMP, a Victory Capital investment franchise, provides rules-based investment strategies that combine fundamental criteria with volatility weighting to seek to improve an investor’s ability to outperform traditional indexing strategies.
Victory Capital currently offers 10 ETFs and 16 mutual funds managed by Compass EMP. For more information, please visit www.compassempetf.com.
ABOUT VICTORY CAPITAL
Victory Capital is a multi-boutique asset management firm, headquartered in Cleveland, OH. As of June 30, 2015, the firm had approximately $35.7 billion in assets under management and advisement.
Victory Capital is comprised of nine autonomous investment franchises, each with an independent culture and investment approach. The franchises are supported by a robust distribution and operational platform, allowing them to focus solely on investment management.
Victory Capital provides investment advisory services to institutional clients including corporations, non-profits, public funds, Taft-Hartley and sub-advisory clients through separate accounts and commingled funds. Through its intermediary channel, Victory Capital also offers retail and retirement clients mutual funds and ETFs as well as separately managed accounts through wrap fee programs and access to its investment models through unified managed accounts. For more information, please visit www.vcm.com.
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Investments involve risk including possible loss of principal. ETFs have the same risks as the underlying securities traded on the exchange throughout the day. Redemptions are limited and often commissions are charged on each trade, and ETFs may trade at a premium or discount to their net asset value. The Funds are new exchange traded funds (“ETFs”) and have a limited history of operations for investors to evaluate. The Funds are not actively managed and do not, therefore, seek returns in excess of their respective Index. The Funds’ returns may not match the returns of their respective Index for a number of reasons, including: the Fund incurs operating expenses not applicable to the Index and incurs costs in buying and selling securities; the Fund may not be fully invested at times; differences in the valuation of securities and differences between the Fund’s portfolio and the Index resulting from legal restrictions, cost, or liquidity constraints. The Compass EMP US Small Cap 500 Volatility Weighted Index ETF, Compass EMP US Small Cap High Dividend 100 Volatility Weighted Index ETF, and Compass EMP U.S. Discovery 500 Enhanced Volatility Weighted Index ETF may invest in Small Cap companies. The earnings and prospects of smaller-sized companies are more volatile than larger companies. Small-sized companies may have limited markets, product lines, or financial resources and lack management experience and may experience higher failure rates than larger companies. The Compass EMP U.S. 500 Volatility Weighted Index ETF and the Compass EMP U.S. 500 Enhanced Volatility Weighted Index ETF may invest in medium cap companies which involves additional risks such as limited liquidity and greater volatility than large cap companies. Compass EMP U.S. Discovery 500 Enhanced Volatility Weighted Index ETF, Compass EMP U.S. 500 Enhanced Volatility Weighted Index ETF, Compass EMP Developed 500 Enhanced Volatility Weighted Index ETF, and the Compass EMP U.S. EQ Income 100 Enhanced Volatility weighted Index ETFs may invest, directly or indirectly, in “junk bonds”. Such securities are speculative investments that carry greater risks than higher quality debt securities. In general the price of a fixed income security falls when interest rates rise. The Compass EMP US Large Cap High Dividend 100 Volatility Weighted Index ETF, Compass EMP US Small Cap High Dividend 100 Volatility Weighted Index ETF, Compass EMP International High Dividend 100 Volatility Weighted Index ETF high dividend strategies may not be successful. Dividend paying stocks may fall out of favor relative to the overall market. The Compass EMP Developed 500 Enhanced Volatility Weighted Index may invest in securities included in, or representative of securities included in, the index, regardless of their investment merits. Compass EMP International High Dividend 100 Volatility Weighted Index ETF and Compass EMP International 500 Volatility Weighted Index ETF are subject to the special risks associated with investments in foreign markets which may include less liquidity, greater volatility, less developed or less efficient trading markets, lack of comprehensive company information, political instability and differing auditing and legal standards. The Fund’s net asset value could decline as a result of changes in the exchange rates between foreign currencies and the US dollar. Additionally, certain foreign countries may impose restrictions on the ability of issues of foreign securities to make payment of principal and interest to investors located outside the country, due to blockage of foreign currency exchanges or otherwise.
Strategic beta refers to an investment style where the manager passively follows an index designed to take advantage of perceived systematic biases or inefficiencies in the market. Strategic beta strategies attempt to deliver a better risk and return trade-off than conventional market cap weighted indices by using alternative weighting schemes based on measures such as volatility.
Please consider the Funds’ investment objectives, risks, charges, and expenses carefully before investing. This and other important information about the Compass EMP Funds can be found in the Funds’ current prospectus. Please read the prospectus carefully before investing.
For Compass EMP Funds ETFs, the current prospectus may be obtained by calling your Financial Advisor or shareholder services at 1-866-376-7890.
Nothing contained in this communication constitutes tax, legal, or investment advice. Investors must consult their tax advisor or legal counsel for advice and information concerning their particular situation.
VictoryShares ETFs are distributed by Foreside Fund Services, LLC., member FINRA and SIPC. Victory Capital Management Inc., not an affiliate of Foreside Fund Services, LLC., is the investment advisor to the Funds and receives a fee from the Funds for its services.