April 22, 2026
In a recent conversation with Mannik Dhillon, president of investment franchises & solutions and head of ETFs at Victory Capital, a clear theme emerged: growth in the ETF space is not about speed—it’s about sequencing. Victory Capital’s approach reflects a deliberate strategy of building core competencies in specific asset classes and investment disciplines before expanding into adjacent product categories, often accelerated through targeted M&A.
VictoryShares has established itself as a differentiated ETF platform by focusing on outcome-oriented strategies rather than broad market exposure alone. Its lineup spans risk-weighted equity approaches, dividend growth strategies, multi-factor models, free cash flow funds, and an expanding suite of active fixed income and equity ETFs. Each category reflects a consistent philosophy—deliver rules-based or actively managed exposures that solve specific portfolio construction needs.
Dhillon emphasized that successful ETF expansion requires more than product proliferation. Instead, Victory Capital focuses on developing “core excellence” within a strategy type before scaling it. For example, building credibility in factor-based investing or options-driven income strategies allows the firm to deepen expertise, refine portfolio construction, and establish a track record before launching additional variations or extensions. Dhillon also framed Victory Capital’s perspective as that of an allocator — giving the firm a unique advantage in designing ETFs that institutional allocators and portfolio constructors want to use.
This disciplined approach reduces execution risk and strengthens distribution. Dhillon says advisors and institutional investors are more likely to adopt new ETFs from a provider that has already demonstrated capability within a given category. In that sense, product development is cumulative—each success builds a foundation for the next.
M&A plays a critical role in accelerating this process. Rather than building every capability organically, Victory Capital has selectively acquired firms with established expertise in specific asset classes or investment styles. These acquisitions are not simply about adding assets under management—they are about importing intellectual capital, portfolio management talent, and investment process.
Once integrated, these capabilities can be translated into ETF wrappers, where it makes sense, potentially enabling faster entry into new segments of the market. This “buy and build” model allows Victory Capital to shorten the time between identifying an opportunity and delivering a competitive product, while still maintaining the depth required to differentiate. Dhillon says this helps in organic product development.
At over $313.1 billion in AUM as of March 31, 2026, Victory Capital has already achieved meaningful scale. However, Dhillon made it clear that the firm’s ambition extends much further. The long-term goal is to reach $1 trillion in assets—a target that will require both organic growth and continued strategic acquisitions.
The ETF platform is central to that vision. As investors appear to increasingly favor transparent, cost-efficient, and tax-efficient* vehicles, Dhillon believes ETFs can provide a natural channel for delivering both passive and active strategies. He sees VictoryShares serving as a bridge between traditional asset management capabilities and evolving client demand for more flexible investment solutions.
What distinguishes Victory’s approach is its balance between innovation and discipline. While the firm is active in launching new products, it avoids the temptation to chase every emerging trend. Instead, it prioritizes areas where it believes it can establish a competitive edge—whether through factor design, income potential, or active management expertise.
In an ETF market that is both crowded and rapidly evolving, this strategy positions Victory Capital to grow with intention. By combining targeted M&A with a focus on building deep expertise before expanding product lines, the firm is not just adding ETFs—it is constructing a scalable, durable platform designed for long-term leadership in the asset management industry.
ETF Industry Strategy
The VictoryShares fund lineup reflects a focused and differentiated product within the ETF marketplace, built around a few clear strengths, while acknowledging some structural limitations. According to Dhillon, one of the platform’s most compelling advantages is its deep expertise surrounding free cash flow (FCF) that scales across applications. With VFLO emerging as the firm’s flagship product with complementary extensions across growth, small cap, and international equities, VictoryShares has established a recognizable niche that resonates with advisors seeking quality and profitability. Alongside this, he states, the platform has quietly built meaningful scale in fixed income, particularly in core, core plus and short-duration actively managed bond ETFs, positioning itself to benefit from continued investor migration toward active ETF structures in fixed income. More broadly, Dhillon continues, VictoryShares excels in designing advisor-friendly solutions that blend income, volatility management, and factor exposures, reinforcing its reputation as a provider of outcome-oriented strategies rather than commoditized beta.
At the same time, the platform’s positioning reflects deliberate trade-offs. VictoryShares does not compete in ultra-low-cost core beta, leaving it outside the dominant flows captured by firms like Vanguard, BlackRock, and State Street. Its international equity lineup, while conceptually aligned with its factor philosophy, remains under-scaled relative to its U.S. offerings, suggesting limited traction or distribution challenges abroad. Additionally, like many mid-tier ETF issuers, VictoryShares maintains a long tail of subscale products—funds below roughly $300 million in AUM—while the firm demonstrates strong product discipline at the core, its broader lineup reflects the typical experimentation and fragmentation seen in growing ETF platforms.
Overall, VictoryShares is best understood as a specialist asset manager rather than a generalist—an ETF issuer that prioritizes innovation, factor precision, and targeted growth over mass-market scale. Its strategy is not to compete head-on with the largest providers, but to build credibility within specific investment frameworks and expand outward from positions of strength. This approach, if executed consistently, positions the firm to grow selectively and sustainably, particularly as demand for differentiated, outcome-oriented ETFs continues to expand.
Michael Cronan, Managing Editor, ETF Insight.
VictoryShares ETFs are distributed by Victory Capital Services, Inc. For more information, visit www.victoryshares.com.
*The ETF structure offers tax efficiencies in taxable accounts. Transactions in shares of ETFs may result in brokerage commissions and will generate tax consequences. All regulated investment companies are obliged to distribute portfolio gains to shareholders. Certain traditional mutual funds can also be tax efficient.
EDITORIAL NOTE: Michael Cronan is the Managing Director of ETFSector.com, the opinions expressed within this article are his own.
