The new suite of ETFs, which consists of four smart beta equity ETFs and two fixed income ETFs, was built as a core portfolio-building solution, providing investors more choices at a competitive entry point.
The smart beta equity ETFs strategy is to focus on two primary factors: value and momentum, which identify stocks with attractive valuations and positive price momentum. The strategy includes holdings that are weighted in such a way to help diversify the risk of the individual holdings.
The four new smart beta equity ETFs include USAA MSCI USA Value Momentum Blend Index ETF (ULVM), which has a net expense ratio of 20 basis points; USAA MSCI USA Small Cap Value Momentum Blend Index ETF (USVM), which has a net expense ratio of 25 basis points; USAA MSCI International Value Momentum Blend Index ETF (UIVM), with a net expense ratio of 35 basis points; and USAA MSCI Emerging Markets Value Momentum Blend Index ETF (UEVM), which has a net expense ratio of 45 basis points.
Meanwhile, the new actively managed fixed income ETFs capitalize on USAA’s decades of experience in core bond categories. The USAA Core Intermediate-Term Bond ETF (UITB), which has a net expense ratio of 40 basis points, has an investment objective that focuses on high current income without undue risk to principal. The USAA Core Short-Term Bond ETF (USTB), which has a net expense ratio of 35 basis points, features an investment objective that focuses on high current income consistent with preservation of capital.
According to John Spear, chief investment officer at USAA Mutual Funds, USAA is a significant institutional investor in ETFs – but it was time to launch the firm’s own funds.
“At USAA, we continually strive to meet our members’ needs and help them achieve their financial goals. We’ve had a long and successful history offering marketplace ETFs and currently have more than $5 billion invested in third-party ETFs through multiple asset classes,” said Spear, in a statement. “When you add our core competency of active fixed income fund management and track record providing smart beta strategies, it was a logical next step to offer USAA-branded ETFs to complement our investment solutions and help our members prepare for their financial future.”
USAA provides insurance, banking, investments, retirement products and advice to more than 11 million clients, or members, who must have a military-family connection in order to join.
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