Victory Portfolios II Announces Liquidation of ETFs

Victory Portfolios II, a diversified global asset management firm, has announced the liquidation of three of its exchange-traded funds (ETFs): VictoryShares US Discovery Enhanced Volatility Wtd ETF (CSF), VictoryShares US Small Cap Volatility Wtd ETF (CSA), and VictoryShares THB Mid Cap ETF (MDCP). The decision follows the company's regular review of its product lineup to ensure it best meets client needs.

Key dates and details regarding the liquidation process include:

* April 22, 2025: Last day for Creation Units purchase orders
* April 23, 2025: Final trading day on Nasdaq
* April 29, 2025: Expected liquidation date
* Shareholders may sell their holdings on Nasdaq until April 23, 2025, or receive a cash distribution equal to the net asset value during liquidation
* Victory Capital Management Inc. (VCM) will bear all fees and expenses related to the liquidation, except for brokerage fees and other related costs

The liquidation of these ETFs will have several impacts on the broader market and investors, particularly those with holdings in these funds.



Market Impact:

* Reduced liquidity: The delisting of these ETFs from the Nasdaq Stock Market will reduce overall liquidity in the market, potentially leading to increased volatility in related securities or sectors.
* Potential spillover effects: The liquidation of these ETFs may have spillover effects on other ETFs or related securities, as investors may reallocate their assets to similar funds or sectors. This could lead to increased trading volumes and potential price movements in these related securities.

Investor Impact:

* Capital gains/losses: Shareholders who continue to hold shares of the Funds on the liquidation date will receive a cash distribution equal to the net asset value of their shares as of that date. This distribution will generally be treated as a capital gain or loss for tax purposes, equal to the amount received for their shares over their adjusted basis in such shares. Investors should consult their personal tax advisor about the potential tax consequences.
* Opportunity cost: Investors who held these ETFs may face opportunity costs if they decide to sell their shares before the liquidation date. They may receive less than the net asset value of their shares if they sell on the Nasdaq prior to market close on April 23, 2025.
* Reallocation of assets: Investors holding these ETFs may need to reallocate their assets to other investment vehicles, which could involve additional transaction costs and potential tax implications.

Victory Capital Management Inc. (VCM), the adviser to the VictoryShares ETFs, will bear all fees and expenses that may be incurred in connection with the liquidation of the ETFs and the distribution of the cash proceeds to investors, other than brokerage fees and other related expenses. This means that investors will not be responsible for these liquidation-related fees and expenses, which could be a positive outcome for shareholders.

In conclusion, the liquidation of these ETFs will have both market and investor impacts, including reduced liquidity, potential spillover effects, capital gains/losses, opportunity costs, and the need for investors to reallocate their assets. Investors should carefully consider these factors and consult with their financial advisors to make informed decisions regarding their portfolios.