UIVM: A Steady Hand in Volatile Markets

The global equity landscape has become increasingly bifurcated, with investors seeking both yield and resilience amid geopolitical tensions, monetary policy uncertainty, and shifting growth dynamics. For income-focused portfolios, the VictoryShares USAA MSCI International Value Momentum ETF (UIVM) offers a compelling blend of monthly distributions, a disciplined factor-based strategy, and a focus on non-U.S. markets ripe for value-driven opportunities. Let's dissect why this ETF could be a cornerstone for yield seekers in 2025 and beyond.

The Appeal of Monthly Distributions in a Yield-Starved World

UIVM stands out in an environment where traditional fixed-income instruments offer paltry returns. While many equity ETFs distribute dividends quarterly, UIVM's monthly payout schedule provides a steady cash flow, aligning with the needs of retirees or investors reliant on regular income streams. Over the past year, its distributions averaged $0.16 per month, with a trailing 12-month yield of 2.31% as of July 2025.

Critically, these distributions are underpinned by a strategy designed to navigate volatility. UIVM's factor-based indexing—combining value and momentum metrics—targets companies with strong fundamentals and upward price trends while avoiding high-volatility names. This approach has delivered a maximum drawdown of just 4.1% over the past 12 months, faring better than broader benchmarks like the MSCI World Index during recent dips.

The Value-Momentum Sweet Spot

UIVM's performance hinges on its dual factor tilt:
1. Value Focus: The ETF selects stocks with lower price-to-book, price-to-earnings, and dividend yield ratios, emphasizing undervalued companies in sectors like Financials (26.5%) and Industrials (20.8%).
2. Momentum Bias: It tilts toward equities with strong price trends, capitalizing on investor sentiment shifts.

The combination of these factors creates a dynamic yet disciplined portfolio, rebalanced quarterly to ensure alignment with its index. This discipline is critical in today's markets, where structural shifts—such as the energy transition and AI-driven productivity gains—are reshaping sector dynamics.

Why Non-U.S. Markets Are the New Frontier for Value Hunters

UIVM's focus on non-U.S. equities positions it to benefit from two tailwinds:
1. Valuation Disparity: Many international markets, particularly in Europe and Asia, trade at discounts to U.S. peers due to lingering geopolitical risks and currency headwinds. For instance, UIVM's top holdings include Poste Italiane SpA (+18% YTD) and Industrial Bank of Korea (+25% YTD), which have outperformed their benchmarks.
2. Institutional Appetite for MSCI-Linked Products: MSCI's broader indices have seen $100 billion in inflows year-to-date, as institutional investors seek exposure to its rigorous factor methodologies. UIVM's direct link to the MSCI World ex USA Select Value Momentum Blend Index leverages this credibility.

Risk Considerations and the Case for Caution

While UIVM's strategy is compelling, investors must acknowledge its distribution volatility. For example, its payout dropped to $0.0296 in August 2024 before rebounding to $0.28 in December 2024—a swing of 885%. This variability stems from its factor-based rebalancing and quarterly index updates, which can lead to uneven cash flows.

Additionally, the ETF's heavy tilt toward value-oriented sectors (e.g., Financials, Industrials) could underperform if growth stocks regain dominance. Investors should pair UIVM with complementary exposures, such as quality-focused equities or inflation-linked bonds, to balance risk.

Investment Thesis: A Core Satellite for Income Portfolios

UIVM is best positioned as a core holding for income-focused portfolios, especially in environments where equity markets remain choppy. Its low expense ratio (0.35%), monthly payouts, and focus on non-U.S. value opportunities make it a cost-effective way to diversify away from U.S. dominance.

For aggressive investors, consider using UIVM as a satellite holding, paired with leveraged ETFs or futures to amplify returns during momentum-driven rallies. Meanwhile, conservative investors can layer it with dividend aristocrats or short-duration bonds to smooth cash flows.

Final Take

In an era of market fragmentation, UIVM offers a disciplined path to income and growth. Its factor-based strategy, coupled with monthly distributions and a focus on undervalued international equities, positions it to thrive in 2025's uneven recovery. While volatility remains a risk, the ETF's methodology and institutional-grade indexing make it a must-consider for yield-driven portfolios.

As you evaluate allocations, ask: Can your portfolio afford to ignore this blend of value, momentum, and global diversification? The answer might just be no.

Data as of July 14, 2025. Past performance does not guarantee future results. Consult a financial advisor before making investment decisions.