USTB Profile
The VictoryShares USAA Core Short-Term Bond ETF aims to provide investors with a stable income stream by primarily focusing on short-term debt securities. Under normal market conditions, the fund allocates at least 80% of its assets to a diversified portfolio of debt securities and derivative instruments that exhibit economic characteristics similar to those of traditional fixed-income securities. This approach allows the fund to maintain a short-duration profile, with a dollar-weighted average portfolio maturity of three years or less.
The fund's investment strategy emphasizes low-duration securities, which are designed to mitigate interest rate risk and offer relatively stable returns. By concentrating on short-term bonds, the fund seeks to minimize exposure to interest rate fluctuations, making it suitable for investors seeking capital preservation and consistent income. In addition to U.S. government and corporate bonds, the fund may also invest in a variety of fixed-income instruments, including derivatives that provide similar economic benefits.
To enhance its diversification and yield potential, the fund is permitted to allocate up to 20% of its net assets to foreign debt securities. This includes non-U.S. dollar-denominated bonds and securities issued by companies in emerging markets. By incorporating international and emerging market debt, the fund aims to capture additional yield opportunities and broaden its exposure, though this also introduces currency and geopolitical risks.
As a non-diversified fund, it is concentrated in a specific sector of the bond market, focusing on short-term securities and related instruments. Investors should be aware of the fund's emphasis on low-duration investments and its exposure to foreign and emerging market debt, which can affect the fund's performance and risk profile. This strategy is intended to balance income generation with risk management, aligning with the investment goals of those seeking stability in their fixed-income portfolio.
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