One of Victory Capital’s free cash flow (FCF) ETFs has quickly notched another significant milestone. The VictoryShares Free Cash Flow ETF (VFLO ) exceeded $2 billion in assets under management as of January 17, 2025, about a year and a half after its launch. VFLO provides exposure to companies that generate strong FCF, which indicates operating efficiency and quality business.
VFLO has seen tremendous asset growth in the past year as its unique methodology stands out. The ETF notably crossed $1 billion in assets as of October 4, adding another billion through inflows and price appreciation in the following three months alone.
See more: Keep Your Equity Portfolio Forward-Looking With VFLO
FCF is an attractive metric for evaluating investment opportunities as it can measure a company’s health. FCF is the remaining cash a company has after covering all expenses. It can be used to invest in growing the business, pay dividends, or pay down debt. VFLO has surged in popularity recently as many investors are looking to focus on high-quality companies in the current environment.
What Sets VFLO Apart
VFLO tracks the Victory U.S. Large Cap Free Cash Flow Index (the Index) and its benchmark is the Russell 1000 Value Index.
VFLO’s underlying Index is unique in that it considers both trailing and anticipated FCF based on analyst estimates. The future FCF component of the Index may help the ETF capture lucrative investment opportunities. Additionally, a growth filter screens out companies with high FCF but weak growth prospects, which may help drive performance in both value and growth market cycles.
Lastly, the rules-based Index accounts for the overall FCF and FCF yield when weighing companies.
For more news, information, and analysis, visit the Free Cash Flow Channel
VettaFi LLC (“VettaFi”) is the index provider for VFLO, for which it receives an index licensing fee. However, VFLO is not issued, sponsored, endorsed, or sold by VettaFi. VettaFi has no obligation or liability concerning the issuance, administration, marketing, or trading of VFLO.
Disclosure Information
Carefully consider a fund’s investment objectives, risks, charges, and expenses before investing. To obtain a prospectus or summary prospectus containing this and other important information, visit http://www.vcm.com/prospectus. Read it carefully before investing.
All investing involves risk, including the potential loss of principal. Please note that the Fund is a new ETF with a limited history. The Fund has the same risks as the underlying securities traded on the exchange throughout the day. Redemptions are limited, and commissions are often charged on each trade. ETFs may trade at a premium or discount to their net asset value. The Fund invests in securities included in, or representative of securities included in, the Index, regardless of their investment merits. The performance of the Fund may diverge from that of the Index. Investing in companies with high free cash flows could lead to underperformance when such investments are unpopular or during periods of industry disruptions.
The Fund could also be affected by company-specific factors that could jeopardize the generation of free cash flow. Derivatives may not work as intended and may result in losses. Large shareholders, including other funds advised by the Adviser, may own a substantial amount of the Fund’s shares. The actions of large shareholders, including large inflows or outflows, may adversely affect other shareholders, including potentially increasing capital gains. The value of your investment is also subject to geopolitical risks such as wars, terrorism, environmental disasters, and public health crises; the risk of technology malfunctions or disruptions; and the responses to such events by governments and/or individual companies.
Additional Information
The Victory U.S. Large Cap Free Cash Flow Index aims to select high quality companies from its starting universe by applying profitability screens. It then selects companies with the strongest free cash flow yield that exhibit higher growth. The Index is rebalanced and reconstituted quarterly. This Index calculates free cash flow yield by dividing expected free cash flow by enterprise value. Expected free cash flow is the average of trailing 12-month FCF and next 12-month forward free cash flow. Enterprise value (EV) measures a company’s total value, often used as a more comprehensive alternative to equity market capitalization.
Effective on or about February 28, 2025, Foreside Fund Services, LLC (“Foreside”) will no longer serve as the distributor to the VictoryShares ETFs. Victory Capital Services, Inc.(VCS) , an affiliate of the Fund’s adviser, will replace Foreside in this capacity. VCS and its affiliates are not affiliated with Foreside.
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