Merit Financial Bets $8.6 Million on Short-Term Bond ETF, Signaling Confidence in Defensive Play

In a notable move during the volatile final quarter of 2025, Merit Financial Group, LLC bolstered its stake in the VictoryShares USAA Core Short-Term Bond ETF (NASDAQ:USTB), regulatory filings show. The wealth manager acquired an additional 167,898 shares, a transaction valued at approximately $8.55 million, lifting its total holding to about 1.05% of its reported portfolio.

The purchase underscores a growing institutional appetite for defensive assets as investors grapple with persistent inflation and geopolitical tensions. "This isn't just a routine rebalance," said market analyst David Chen of FinScope Advisors. "A commitment of this size into a short-term bond ETF suggests Merit is battening down the hatches, seeking stability and yield while waiting for clearer economic signals."

The $1.7 billion USTB ETF is designed for capital preservation and income, offering a trailing 12-month dividend yield of 4.60%. It invests in a diversified mix of high-quality, short-duration debt, including up to 20% in foreign and emerging market securities. While its 0.34% expense ratio is above some passive peers, it pays for active management aimed at navigating interest rate risks.

Performance-wise, USTB shares gained about 5.9% over the past year, a solid return for its asset class, though it trailed the soaring S&P 500 by over 7 percentage points. As of late January 2026, shares traded at $50.90, just 0.37% below their 52-week high.

Investor Reactions: A Mix of Strategy and Skepticism

We spoke to several investors for their take on the news:

• Michael Rourke, a retired portfolio manager in Florida, praised the move: "In this environment, parking capital in a liquid, yield-generating fund like USTB is prudent. Merit's buy is a strong endorsement for investors looking to reduce portfolio volatility without moving entirely to cash."
• Sarah Lin, a fintech startup CFO in Austin, was more measured: "The yield is attractive, but the fee gives me pause. For long-term holders, those basis points add up. I'd want to compare it against a broader set of short-term Treasury or corporate bond ETFs first."
• Greg "Hawk" Hawkins, an independent trader and frequent financial commentator, was sharply critical: "This is classic rearview mirror investing! They're chasing last year's yield after the big rate hikes. If the Fed cuts sooner than expected, these short-term funds could underperform. It's a safe, lazy bet for a firm that's afraid of real market action."
• Priya Mehta, a financial planner in Chicago, focused on client utility: "For my risk-averse clients nearing retirement, this ETF is a core holding. Merit's increased position validates its role as a ballast. It's not about beating the market; it's about reliable income and protecting principal when equities tumble."

The transaction reflects a broader trend of asset managers adjusting allocations in anticipation of economic softening. While not a high-growth vehicle, USTB's role may become increasingly central if market turbulence returns, offering a haven with a modest income stream.

Disclosure: This analysis is for informational purposes only and is not investment advice. Investors should conduct their own research or consult a financial advisor.