A balanced, broad market growth strategy with the goal of tactically mitigating investor risk.
WHAT MAKES TPLE DIFFERENT?
It is the first biblically/ethically responsible, smart-beta investment product aimed at delivering broad market exposure while tactically managing risk. The diversity of holdings is achieved through a proprietary volatility weighting methodology, and risk is managed through a tactical strategy that automatically shifts the ETF holdings from stocks to cash equivalents during periods of significant market declines.
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The Fund seeks to provide investment results that track the performance of Victory US Large/Mid Cap Long/Cash Volatility Weighted BRI Index before fees and expenses. “BRI” is shorthand for Biblically Responsible Investing.
The Fund seeks to achieve its investment objective by investing, under normal market conditions, at least 80% of its assets directly or indirectly in the securities included in the Victory US Large/Mid Cap Long/Cash Volatility Weighted BRI Index (the “Index”), an unmanaged, volatility weighted index created by the Fund’s Sub-Adviser. A volatility weighted index assigns percentage values to each security in the Index based on the volatility of that security in the market. More volatile stocks have a lower weighting, and less volatile stocks are assigned a higher weighting.
In addition, the fund seeks to manage risk during times of significant market decline by employing a rules-based mathematical formula to reduce exposure in the equity markets by moving to cash equivalents. The fund will then reallocate to stocks when market prices have either further declined or rebounded. These tactical fund adjustments are executed following a fixed metric of allocations correlating with the market price’s decrease or increase.
Construction and Volatility Weighting
The Index combines fundamental criteria with individual security risk control achieved through volatility weighting of individual securities. The Index follows a proprietary rules-based methodology, developed by the Fund's subadviser, to construct its constituent securities.
The Index universe begins with the stocks included in the Nasdaq Victory US Large Cap 500 Volatility Weighted Index, a volatility weighted index composed of the 500 largest U.S. companies by market capitalization with net positive earnings over the last four consecutive quarters.
The Index then eliminates the companies that do not satisfy the eVALUEator proprietary Biblically Responsible Investing (“BRI”) filtering criteria.
The remaining stocks are weighted based on their standard deviation (volatility) of price changes over the last 180 trading days. Stocks with lower volatility receive a higher weighting and stocks with higher volatility receive a lower weighting.
The Index is reconstituted, which includes a full screen and reweighting of each holding, every April and October (based on information as of the prior month-end) and is adjusted to limit exposure to any particular sector to 25%. The Index may include more than, or fewer than, 500 stocks depending on the number of companies meeting the Index’s criteria, including the biblical filters.
The Index follows a mathematical index construction process designed to limit risk during periods of significant (non-normal) market decline by reducing its exposure to the equity market. Market decline is measured by reference to the Victory US Large/Mid Cap Volatility Weighted BRI Index (“Reference Index”), which is composed of the same securities as in the Index but without any allocation to cash.
During a period of significant market decline, defined as a decline of 10% or more from the Reference Index’s all-time daily high closing value compared to its most recent month-end closing value, the Index’s exposure to the market may be as low as 25% depending on the magnitude and duration of such decline.
If the month-end value of the Reference Index declines 10% or more from its all-time closing high, the Index will reallocate 75% of the stocks included in the Index to cash or cash equivalents.
For more detailed construction, management or allocation details, please refer to the fund’s prospectus.