There were no changes to either of the VictoryShares models this week, as each of the current positions continues to demonstrate sufficient relative strength against their counterparts. In absence of changes, we highlight strength in the VictoryShares US Small Cap Volatility Weighted ETF (CSA).

Small caps continue to shine, demonstrating favorable relative strength. As previously discussed, small cap growth currently ranks first in the DALI Size and Style rankings as well as in the top two (out of 135) on the Asset Class Group Scores page, each evidencing the group’s leadership. Despite the sharp pullback last week for many of the highfliers, the Russell 2000 (RUT) is still up over 15% YTD while the S&P 500 (SPX) lags with a 3.9% gain (through 3/1). Although small caps appear to hold the leadership baton, investing in the area can prove challenging with generally higher levels of volatility. VictoryShares sought to address this by launching CSA back in 2015, a strategy that seeks to provide small cap exposure without the historically elevated volatility. CSA was recently featured on ETF Trends, which stated, “The ETF offers a better approach than many of the most widely followed small cap benchmarks. In fact, the VictoryShares fund can be seen as a higher quality alternative to the Russell 2000 Index funds.” To read more on the strategy, click here.

In addition to favorable qualitative measurements, CSA sports an optimal fund score of 4.50 and strongly positive score direction of 2.46. The ETF trades on three consecutive Point and Figure buy signals, well-above its bullish support line, and recently experienced a flip to positive weekly momentum which suggests the near-term potential for further upside. Furthermore, CSA ranks in the 93rd performance percentile of all equity funds on a YTD basis, and in the 94th performance percentile over the past 90 days. Note CSA currently sits on a stem of Xs in overbought territory, so those looking to initiate new long exposure way consider entering on a pullback.

This weekly overview is designed to be used as a "radar" screen to bring your attention to potentially important technical changes that may require your attention and potential action. When evaluating the Fund Score, the strongest issues have scores of 4 or higher while those ETFs with scores below a 3 are no longer considered solid citizens.

This section of the report categorizes all of the Victory Mutual Funds by their respective broad group. Along with each group, you can view the Average Group Score, which is an average of the scores of all funds represented in that particular group. Those Victory Mutual Funds that meet or exceed the Average Group Score will be highlighted in green in order to easily view those Victory Mutual Funds that have superior strength within their respective group. You want to focus on those Victory Mutual Funds that exhibit superior strength when looking to add new exposure to a particular group.

The distribution curve places each ETF on a bell curve according to their respective degrees of overbought or oversold status using a 10-week distribution. ETFs that are statistically oversold will appear on the left-hand side of the bell curve, while those that have become statistically overbought will appear on the right-hand side of the bell curve. Perhaps the most useful attribute of this feature is that it displays the entire universe on the curve at one time to give us a general picture of whether the Victory ETF universe is generally overbought on a near-term basis, or generally oversold. Our best opportunities are to buy strong relative strength ETFs that have regressed back toward mean conditions based on market weakness, or have become oversold based upon extreme market weakness. Weekly Distribution is a short-term gauge that is most helpful in timing entry and exit points, while the longer-term information of trend and relative strength is a more controlling factor in the decision of whether to buy or sell.

Average Level

33.99

						VSMV
						CIZ		CEZ
						CIL		CEY
						VSDA		CID
						UIVM	CFA	USVM	CDL
		uitb			ustb	UEVM	CFO	ULVM	CSB	CSF	CSA
<--100	-100--80	-80--60	-60--40	-40--20	-20-0	0-20	20-40	40-60	60-80	80-100	100->

VictoryShares ETF Models

The VictoryShares ETF Models are designed to identify major themes in the US equity marketplace through the use of the Point & Figure relative strength tools. For more information on the portfolio construction and backtesting, see the model info file on the models page.

Weekly Changes: 

* Dates prior to 09/04/2018, which is when the VictoryShares Rotation Model became available on the Dorsey Wright Research Platform are representative of when the position was added to the backtested model

* Dates prior to 09/04/2018, which is when the VictoryShares Select Model became available on the Dorsey Wright Research Platform are representative of when the position was added to the backtested model.