VictoryShares Emerging Markets Value Momentum ETF (UEVM) seeks to track an index that measures emerging market stocks exhibiting both value characteristics and positive price momentum. This dual-factor approach targets undervalued companies in developing economies that are also showing upward price trends, providing exposure to approximately 25 major emerging market countries.
How It Works
UEVM uses a rules-based methodology that screens emerging market stocks for value metrics like low price-to-book and price-to-earnings ratios, then applies momentum filters based on recent price performance and earnings revisions. The fund employs a modified market-cap weighting system that tilts toward stocks meeting both criteria. Holdings are rebalanced quarterly to maintain factor exposures, with the portfolio typically containing 200-400 stocks across various sectors and countries including China, India, Taiwan, and Brazil.
Key Features
- Combines value and momentum factors in single ETF, eliminating need to purchase separate factor funds for emerging markets exposure
- Launched in late 2022 with 0.00% expense ratio, making it one of the lowest-cost emerging markets factor ETFs available
- Offers 2.69% dividend yield from emerging market value stocks, providing income alongside potential capital appreciation
Risks
- This ETF can lose significant value during emerging market selloffs, potentially declining 40-60% during crisis periods like currency devaluations or geopolitical tensions
- Value and momentum factors can underperform for extended periods, causing the fund to lag broad emerging market indices for multiple years
- Currency fluctuations against the U.S. dollar can amplify losses, as emerging market currencies often weaken during global risk-off periods
Who Should Own This
Best suited as a satellite holding (5-15% of equity allocation) for experienced investors with high risk tolerance and 7+ year time horizons seeking factor exposure in emerging markets. Appropriate for investors who understand factor investing cycles and can withstand extended periods of underperformance. Works well alongside core emerging market holdings for tactical factor tilts.