VictoryShares Hedged Equity Income ETF

VictoryShares Hedged Equity Income ETF (HEJD) is an actively managed Victory Capital fund that holds U.S. dividend-paying stocks and sells short stock index futures to offset part of the market's moves. Its target is about 50% exposure to the U.S. stock market. That hedge has kept its swings small but has also held back returns, and its 0.55% expense ratio is above the 0.36% average for similar dividend funds.

• Over the year to Oct 27, 2026, HEJD returned +1.8%, 9th of 9 among similar funds.
• Its worst full calendar year was 2025 (+5.7%); its best was 2025 (+5.7%).
• The deepest fall in its price history was 10.3% (Feb 21, 2025 to Apr 8, 2025), recovered by Jul 2, 2025.

As of Dec 31, 2025, the fund held 189 securities; the ten largest made up 15.76% of assets.

• Over the three months to Dec 31, 2025, investors added a net $0.00 (creations minus redemptions, per the N-PORT report).
• Monthly total returns reported for that quarter: +0.91%, +0.45%, -1.00%.

HEJD does not track an index. Victory Capital Management, the fund's adviser, picks the stocks. At least 80% of assets go into dividend-paying U.S. stocks of any company size. The adviser first screens for companies that were profitable over the trailing 12 months when first bought. From that group it picks stocks with above-average dividend yields, then adjusts for trading liquidity and taxes. As of Dec. 31, 2025, the fund held 189 stocks, and the 10 largest made up 15.76% of assets. The biggest were Merck (about 2%), PepsiCo, Verizon, Altria and OneMain Holdings, along with utilities such as Evergy and Pinnacle West.

The second part is the hedge. The fund sells short futures contracts on broad indexes such as the S&P 500, Russell 2000 and Nasdaq-100. It may also short ETFs that track them. A short futures position gains when the index falls, which cushions losses on the stocks, and it loses money when the index rises. The aim is roughly 50% net exposure to the U.S. market. As of Dec. 31, 2025, the fund held futures on all three indexes. The hedge is optional. Futures add leverage, and the prospectus also lists risks from buying put options and from short positions. Portfolio turnover was 76%, which means the holdings change often.

• HEJD charges 0.55% a year, versus an average of 0.36% for the similar funds below (8th of 9, cheapest first).
• Of that, 0.5% is the management fee; the rest covers other fund expenses.
• The fee includes a 0.37% waiver from the adviser, which may end.
• Using the prospectus's standard example, $10,000 invested would cost about $56 in the first year and $1,097 over 10 years (assuming a 5% annual return).

The short futures hedge targets about half the stock market's exposure, so the fund has moved much less than the market, though it has also earned much less.

HEJD launched on July 11, 2024, so it has no record from the 2008, 2020 or 2022 downturns. Its deepest drop was 10.3%, from Feb. 21 to April 8, 2025. It recovered by July 2, 2025, about 2.8 months later. As of Oct. 27, 2026, its one-year beta was 0.25, which means it moved about a quarter as much as the market. Smaller swings could mean less pressure to sell shares at a loss in a bad year. The trade-off is return. The fund gained 1.8% over the year to Oct. 27, 2026, while similar dividend funds gained 14.7% to 26.1%. Its trailing yield was 1.42%, paid twice a year, and it costs 0.55% a year. Past results don't predict the future, and a plan should look at the whole portfolio, not one fund.

Matched by holdings overlap from the latest N-PORT reports.