The VictoryShares Free Cash Flow ETF (VFLO) crossed $5 billion in assets under management (AUM) within the 4 quarter of 2025.* This milestone is remarkable given the fund's rapid ascent, reaching this scale in less than two and a half years since launching on June 21, 2023. VictoryShares believes that strong FCF can be indicative of a high-quality company, and VFLO's indexed approach is designed to capture companies with this characteristic. VFLO tracks the Victory U.S. Large Cap Free Cash Flow Index (the I ...

Core Viewpoint - Large cap growth companies have significantly driven market gains in 2025, prompting investors to reconsider the role of value-oriented investments in their portfolios. A balanced approach using two free cash flow (FCF) ETFs, the VictoryShares Free Cash Flow Growth ETF (GFLW) and VictoryShares Free Cash Flow ETF (VFLO), is suggested to capture potential upside regardless of market conditions [1]. Group 1: Investment Strategy - The GFLW and VFLO ETFs utilize FCF as a key metric for evaluating equities, which is increasingly important in the current market environment [2]. - GFLW focuses on large-cap companies with the potential to compound FCF over time, assessing both trailing and future FCF to determine growth potential [6]. - VFLO targets companies with the highest FCF yields, emphasizing those that can allocate capital towards enhancing shareholder value through reinvestment, share buybacks, or dividends [7]. Group 2: Market Dynamics - Over the past 15 years, growth has consistently outperformed value, as indicated by the disparity in P/E ratios between the Russell 1000 Growth Index and the Russell 1000 Value Index [2]. - The valuation landscape has shifted in the last five years, with growth stocks trading at a premium compared to value stocks, leading to a widening gap that may introduce risks of growth underperformance if the spread contracts [4]. Group 3: ETF Characteristics - Both GFLW and VFLO are designed to limit exposure to companies with slow growth prospects, thereby reducing the risk of value traps [8]. - The Victory U.S. Large Cap Free Cash Flow Index, tracked by VFLO, selects high-quality companies based on profitability screens and strong FCF yield, rebalancing quarterly [12]. - The Victory Free Cash Flow Growth Index, tracked by GFLW, emphasizes profitable companies with a positive FCF trend and high growth potential [13].

Core Insights - WBI Investments, LLC has reduced its holdings in the VictoryShares Free Cash Flow ETF (VFLO) by selling 82,398 shares, bringing its total position to 160,664 shares valued at $6.02 million, which is a decrease from 1.77% to 1.54% of the fund's AUM [2][3] Fund Overview - The VictoryShares Free Cash Flow ETF (VFLO) focuses on U.S. large- and mid-cap equities with strong free cash flow generation, employing a replication strategy to track its custom index [5][9] - VFLO's investment strategy involves selecting 50 U.S. companies with robust free cash flow characteristics, ensuring a balance between high free cash flow yield and growth potential [9][10] Performance Metrics - As of November 19, 2025, VFLO's price is $37.32, with a dividend yield of 1.57% and a 1-year total return of 18.3%, outperforming the S&P 500 index [3][6] Portfolio Composition - VFLO is among the top five holdings of WBI Investments, LLC, with a current AUM representation of 1.54%, indicating its significance within the fund [3][8] - The ETF's portfolio is constructed by filtering the largest 400 profitable companies down to the 75 highest free cash flow yielding value stocks, ultimately selecting 50 stocks of growing companies [7][10]

Core Insights - The S&P 500 Index is reaching new highs, prompting advisors to seek ways to maintain equity exposure while managing valuation risks. Free cash flow (FCF) is highlighted as a crucial metric for identifying high-quality investment opportunities in the current market environment [1][2]. Group 1: Importance of Free Cash Flow - Free cash flow is emphasized as a tool to navigate elevated valuations and concentration in mega-cap growth stocks, particularly in the context of rising AI-related capital expenditures [2][5]. - Companies with strong and sustainable cash generation are positioned for long-term growth, enhancing portfolio resiliency [2]. - Historical trends show a cyclical dominance of growth and value, with current allocations being 23% towards growth and 15% towards value [3]. Group 2: FCF Mechanics and Evaluation - The evaluation of FCF involves analyzing cash flow relative to enterprise value, aiming to identify companies with attractive valuations based on profitability [8][16]. - Key metrics include FCF yield and return on invested capital (ROIC), which provide a comprehensive measure of profitability [8]. Group 3: FCF ETF Strategies - Victory Capital offers several ETFs focused on FCF, including: - VictoryShares Free Cash Flow Growth ETF (GFLW), which targets U.S. companies with high FCF profitability [9]. - VictoryShares Free Cash Flow ETF (VFLO), focusing on large-cap U.S. stocks with favorable growth prospects [9]. - VictoryShares Small Cap Free Cash Flow ETF (SFLO), investing in profitable small-cap companies with high FCF yields [9]. - International options include VictoryShares International Free Cash Flow ETF (IFLO) and VictoryShares International Free Cash Flow Growth ETF (GRIN) [10]. Group 4: FCF Strategy in Market Conditions - A FCF strategy is deemed beneficial during economic slowdowns, as companies with substantial cash reserves can better withstand downturns compared to those heavily invested [11]. - The flexibility of FCF ETFs makes them suitable for various market environments, supporting the diversification of portfolios [11][12].

Core Insights - The S&P 500 Index is reaching new highs, prompting advisors to seek ways to maintain equity exposure while managing valuation risks. Free cash flow (FCF) is highlighted as a crucial tool for identifying high-quality investment opportunities in the current market [1][2]. Group 1: Importance of Free Cash Flow - Free cash flow is essential for cutting through market noise characterized by high valuations and concentration in mega-cap stocks, particularly in the context of rising AI-related capital expenditures [2][5]. - Companies with strong and sustainable cash generation are positioned for long-term growth, enhancing portfolio resiliency [2]. - Historical trends show that growth and value investing come in cycles, with current allocations being 23% towards growth and 15% towards value [3]. Group 2: FCF Mechanics and Evaluation - The evaluation of FCF involves analyzing a company's cash flow relative to its enterprise value, aiming to identify companies with attractive valuations based on profitability [8][16]. - Key metrics include FCF yield and return on invested capital (ROIC), which provide a comprehensive measure of profitability [8]. Group 3: FCF ETF Strategies - Victory Capital offers several ETFs focused on FCF, including: - VictoryShares Free Cash Flow Growth ETF (GFLW), which targets U.S. companies with high FCF profitability [9]. - VictoryShares Free Cash Flow ETF (VFLO), focusing on large-cap U.S. stocks with favorable growth prospects [9]. - VictoryShares Small Cap Free Cash Flow ETF (SFLO), investing in profitable small-cap companies with high FCF yields [9]. - International options include VictoryShares International Free Cash Flow ETF (IFLO) and VictoryShares International Free Cash Flow Growth ETF (GRIN) [10]. Group 4: FCF Flexibility and Market Resilience - A FCF strategy is beneficial during economic slowdowns, as companies with substantial cash reserves can better withstand market downturns [11]. - The emphasis on diversifying portfolios with a focus on free cash flow is recommended for navigating various market conditions [12].

Core Insights - The VictoryShares Free Cash Flow ETF (VFLO) has demonstrated a balance between value and growth, resulting in significantly lower drawdowns compared to the S&P 500, while also outperforming it during certain market rallies [1] Performance Analysis - VFLO's empirical performance indicates that it has outperformed broader market indices in specific phases, showcasing its effectiveness in capitalizing on market rallies [1] Investment Strategy - The investment approach of VFLO combines rigorous risk management with a long-term perspective on value creation, focusing on macroeconomic trends, corporate earnings, and financial statement analysis [1]

Core Insights - The S&P 500 has reached multiple record highs, leading to investor concerns about whether valuations have peaked and if it is the right time to invest new capital [1] - Victory Capital emphasizes the importance of free cash flow (FCF) as a metric to identify high-quality businesses in elevated-valuation markets [1][2] Free Cash Flow ETFs - Victory Capital has launched a suite of ETFs focused on FCF, including the flagship VictoryShares Free Cash Flow ETF (VFLO), which tracks the Victory U.S. Large Cap Free Cash Flow Index [2] - The VFLO Index targets high-quality, large-cap companies with attractive valuations and solid growth prospects [2][12] Valuation Risks - Current market conditions present valuation risks, with stock prices showing a disconnect from fundamental metrics [3] - Investors are encouraged to mitigate valuation risks by investing in stocks with high free cash flow [3] Growth Factor and FCF - Research indicates that combining growth with FCF can enhance investment effectiveness [4] - The VictoryShares Free Cash Flow Growth ETF (GFLW) provides exposure to U.S. companies with high FCF profitability and growth potential [3][4] International Opportunities - With the dollar's weakness and other macroeconomic factors, investors are increasingly looking at international equities [5] - Victory Capital has introduced the VictoryShares International Free Cash Flow ETF (IFLO) and the VictoryShares International Free Cash Flow Growth ETF (GRIN) to expand access to high-quality, high FCF companies globally [5][6] Diversification Strategy - The suite of FCF ETFs allows investors to build a diversified portfolio, including small-cap exposure through the VictoryShares Small Cap Free Cash Flow ETF (SFLO) [6] - Research supports the appeal of FCF across various regions and asset classes, promoting a diversified investment approach based on FCF [7]

Group 1: VettaFi and Indexing Business - VettaFi, formed from the merger of multiple indexing businesses, was recently acquired by TMX Group and now manages over $75 billion in assets across various indices [2] - The company assists clients in product development, offering services such as formalizing rulebooks, conducting backtesting, and evaluating liquidity [2] - Ongoing management and education are essential for partners to differentiate themselves in the crowded ETF market, which has over 4,000 products [3] Group 2: Thematic ETFs and Portfolio Management - Thematic ETFs are becoming increasingly important, with a focus on analyzing portfolio overlap to enhance existing allocations [3] - Key thematic areas attracting investor demand include artificial intelligence and nuclear energy, with advisors typically allocating 5-10% of portfolios to these strategies [3] Group 3: Gold Market Dynamics - Gold prices are driven by strong physical demand from China and central banks, record ETF inflows, and macroeconomic factors such as a weaker U.S. dollar and inflation uncertainty [4] - Gold serves as a portfolio diversifier and can coexist with bitcoin, fulfilling different roles within an investment strategy [4] Group 4: Notable ETFs - Alerian MLP ETF (AMLP) has over $10 billion in assets and recently celebrated its 15-year anniversary [5] - VictoryShares Free Cash Flow ETF (VFLO) is approaching $5 billion in assets despite being less than three years old [5] - The ROBO Global ETF Suite focuses on robotics and artificial intelligence, while the Range Nuclear Renaissance Index (NUKZ) expands VettaFi's thematic indexing in nuclear energy [5]

Core Insights - Investors may overlook growth-oriented, profitable companies generating free cash flow (FCF) due to home country bias, but can benefit from international exposure through the VictoryShares International Free Cash Flow Growth ETF (GRIN) [1] Group 1: ETF Overview - GRIN tracks the Victory International Free Cash Flow Growth Index, targeting high-growth, international large-cap companies with potential for compounding FCF generation over time [2] - The Index uses FCF as a forward-looking measure, filtering companies based on FCF trends, FCF to return on invested capital, and growth prospects [2] Group 2: Importance of FCF - FCF is a key metric for assessing sustainable growth companies, indicating their ability to reinvest, offer dividends, or buy back stock, all contributing to shareholder value [3] - GRIN's indexed approach focuses on international companies exhibiting these characteristics, helping diversify portfolios concentrated in U.S. equities [3] Group 3: Notable Holdings - Rolls-Royce Holdings, a British aerospace and defense company, is a top holding in GRIN with a 3.88% allocation, potentially benefiting from increased military spending in the EU [4] - Siemens Energy, a German company, is experiencing record orders due to power demands from AI applications, crucial for Europe's power grid [5] - Siemens is also a leading wind power company, contrasting with the U.S. political agenda, highlighting missed opportunities for investors with a home country bias [6] - Sea Limited, based in Singapore, has seen a nearly 70% increase in value for the year as of 8/31/2025, capitalizing on e-commerce strength in Southeast Asia [7] Group 4: Diversification Strategies - For global diversification, investors can pair GRIN with other VictoryShares ETFs, such as the value-oriented VictoryShares Free Cash Flow ETF (VFLO), which focuses on high-quality, large-cap U.S. stocks [8] - The VictoryShares Free Cash Flow Growth ETF (GFLW) provides exposure to U.S. companies with high FCF profitability and growth potential [9]

Investment Strategy & Market Analysis - Free cash flow is considered a crucial valuation metric, favored by investors like Warren Buffett for identifying companies generating more cash than needed for operations [2] - Traditional value investing relying on price-to-book ratios is becoming less relevant as intangible assets now constitute approximately 80-85% of assets in S&P 500 companies [4] - A portfolio based on free cash flow yield outperformed a portfolio based on value factor (determined by price-to-book) between 2000 and June 2024, returning over double the amount [5] ETF Performance & Characteristics - Pacer US Cash Cows ETF (COWZ) selects 100 companies from the Russell 1000 index with the highest free cash flow yield, currently holding approximately $21 billion in assets [7] - VictoryShares Free Cash Flow ETF (VFLO) has gathered over $26 billion in assets year-to-date, totaling $44 billion, due to its consideration of both trailing and forward-looking free cash flow [9] - Invesco NASDAQ Free Cash Flow Achievers ETF (QZ) focuses on technology companies with positive free cash flow in each of the trailing 11 years and year-over-year growth [11] - Invesco product (QZ) has shown the best performance, returning about 19% over the past year, likely due to its focus on technology stocks [15] ETF Methodologies & Holdings - Pacer's COWZ ETF portfolio is heavily weighted in healthcare (20%) and energy (19%), with top holdings including Ford, Exxon Mobil, and Chevron [9] - VictoryShares' VFLO ETF portfolio is heavily weighted in consumer discretionary, with top holdings including Qualcomm, Mercar, and United Health [11] - Invesco's QZ ETF portfolio includes top holdings like Nvidia, Meta, and Broadcom, reflecting its focus on technology companies [12]