Analysis

Key stats

About VictoryShares Developed Enhanced Volatility Wtd ETF

CIZ offers international large-cap exposure with downside protection. The fund takes a two-pronged approach to risk reduction low-vol weighting and cash toggle. The index screens out companies with negative earnings in any of the last four quarters, selects 500 constituents and overweights those with low price volatility. The index applies 20% country cap and 25% sector cap with semi-annual reconstitution starting each March. Furthermore, in the event of a 12% decline in its equity holdings, 75% of the portfolio will be moved to cash or cash equivalents and it has logic to buy back equities in severe downturns. CIZ will move back into stocks gradually if the market continues to decline, or immediately if the market recovers. This sort of rules-based market timing can help limit losses, though there is a risk that the fund will act too late (cash-toggles only occur at month-end). Sibling fund CIL offers the same exposure but without the cash toggle.