Two recent TMX VettaFi advisor polls found that unfamiliarity with free cash flow (FCF) yield and portfolio integration are the top hurdles to broader adoption of FCF strategies. The findings shape how VictoryShares and Solutions positions its FCF ETF suite for advisors navigating today’s market. FCF is the remaining cash a company has after covering all expenses — capital available to reinvest in the business, pay dividends, or pay down debt. We believe FCF exposure gives investors a way to assess value through a single, fundamental metric as traditional asset allocation frameworks come under pressure.
During a webcast with TMX VettaFi, “When Markets Diverge: Finding Opportunity with Free Cash Flow,” two polls highlighted the current state of advisor sentiment regarding FCF, and more specifically how to integrate it into client portfolios.Key Takeaways:
A VettaFi poll revealed that the primary hurdle for broader FCF adoption is a lack of familiarity with how FCF yield differs from traditional valuation metrics like price-to-earnings (P/E) ratios.
Over a third of surveyed advisors utilize VictoryShares FCF ETFs as a strategic tool to reduce Magnificent Seven (Mag 7)1 and mega-cap concentration risk.
VictoryShares and Solutions offer various FCF-focused ETFs across value and growth styles, cap sizes, and regions.
Barriers to Free Cash Flow ETF AdoptionOne of the webcast’s poll questions asked advisors what prevents them from broader implementation of the FCF framework. FCF yield measures a company’s free cash flow against its enterprise value, rewarding stronger balance sheets. The P/E ratio, by comparison, is a stock’s price divided by its earnings per share. While FCF yield can be a strong indicator of corporate health and operational discipline, the feedback highlighted some addressable friction points.
According to the poll, the primary friction point is educational, with 28% of respondents unfamiliar with how FCF yield structurally differs from traditional book-to-market or P/E value metrics. Additionally, survey respondents worried about portfolio integration, with 20% uncertain about how FCF frameworks fit alongside existing holdings. Another 13% expressed concern over unintended sector concentration, such as top-heavy tech weightings. A further 19% cited a short performance track record, and the remaining 19% reported no hesitation at all.How Advisors Use VictoryShares FCF ETFs in Client PortfoliosA second poll asked advisors how they view utilizing the VictoryShares FCF ETFs in client portfolios. Based on the webcast survey data, 36% use them primarily as a tool for reducing Mag 7 and mega-cap concentration risk.
Portfolio complementarity also serves as a strong driver, with 27% using the ETFs alongside an existing dividend or income framework. Additionally, 23% look to replace or complement underperforming traditional passive value funds. The remaining respondents combined multiple FCF ETFs. Of those, 9% paired the VictoryShares Free Cash Flow ETF (VFLO B+) with the VictoryShares Free Cash Flow Growth ETF (GFLW ) for full-spectrum growth exposure. Another 6% sought international diversification via the VictoryShares International Free Cash Flow Growth ETF (GRIN ) to capture international FCF opportunities.VictoryShares Free Cash Flow ETFs: VFLO, GFLW, GRIN, SFLO, IFLOTo address both the hesitations and client needs that surfaced in both polls, a deeper understanding of FCF can open new paths for client education. VFLO tracks the Victory U.S. Large Cap Free Cash Flow Index (the Index) which applies forward-looking growth and profitability filters over trailing cash metrics. These filters have the potential to effectively strip out the structurally impaired companies that appear in market-cap-weighted value indexes, such as the Russell 1000 Value Index. It’s also notable that VFLO had no Mag 7 exposure as of 8/7/2026, which addresses the concentration concern raised in the polls.
With corporate profit margins facing macroeconomic pressure, many clients are seeking profitable growth opportunities that GFLW and GRIN address. By focusing squarely on free cash flow return on invested capital (FCF ROIC), GFLW and GRIN index methodologies can screen for companies with the potential for future growth. Regarding Mag 7 exposure, as of 6/30/2026, NVIDIA was GFLW’s only Mag 7 holding, held at a 3.49% weight.
The full VictoryShares FCF Suite consists of the ETFs named above along with two value-oriented offerings: the VictoryShares Small Cap Free Cash Flow ETF (SFLO ) and the VictoryShares International Free Cash Flow ETF (IFLO ).
These FCF ETF solutions move past traditional benchmarks and give advisors tools to help mitigate mega-cap concentration risk while attempting to capture pure-play, cash-backed value and growth.
1 The Magnificent Seven (Mag 7) consists of Alphabet (GOOGL; GOOG), Amazon (AMZN), Apple (AAPL), Meta Platforms (META), Microsoft (MSFT), NVIDIA (NVDA), and Tesla (TSLA).
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VettaFi LLC (“VettaFi”) is the index provider for VFLO, GFLW, and GRIN for which it receives an index licensing fee. However, VFLO, GFLW, and GRIN are not issued, sponsored, endorsed, or sold by VettaFi, and VettaFi has no obligation or liability in connection with the issuance, administration, marketing, or trading of VFLO, GFLW, and GRIN.
GFLW Top 10 Holdings as of 6/30/2026Disclosure InformationCarefully 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 vcm.com/prospectus. Read it carefully before investing.
All investing involves risk, including the potential loss of principal. The market prices of securities may go up or down, sometimes rapidly or unpredictably, due to general market conditions, such as real or perceived adverse economic, political, or regulatory conditions, recessions, inflation, or changes in interest or currency rates. The Funds have the same risks as the underlying securities traded on the exchange throughout the day. ETFs may trade at a premium or discount to their net asset value. Investments concentrated in an industry or group of industries may face more risks and exhibit higher volatility than investments that are more broadly diversified over industries or sectors. Investments in companies in the industrials sector, including producers of durable goods and companies that process raw materials, may be adversely affected by changes in supply and demand for products and services, governmental regulation and changes in spending policies, world events and economic conditions. Investments in companies in the energy sector may be subject to substantial government regulation, as well as risks involving changes in energy prices, international political instability, and liability for environmental damage and accidents resulting in loss of life or property. The profitability of companies in the healthcare sector may be affected by government regulations and healthcare programs, fluctuations in the cost of, and demand for, medical products and services and product liability claims. The Funds may frequently change their holdings, resulting in higher fees, lower returns, and more capital gains.* International investments* can be more volatile than the U.S. market due to increased risks of adverse issuer, political, regulatory, market, or economic developments and can perform differently from U.S. investments. Investments concentrated in a single country, a small number of countries or a specific region may be particularly affected by adverse markets, rates, and events, which may occur in those countries and regions and typically exhibit higher volatility. IFLO and GRIN are new with a limited operating history. As a result, they do not have a record of performance or other dealings for prospective investors to evaluate when making investment decisions. Investing in companies with high free cash flows could lead to underperformance when such investments are unpopular or during periods of industry disruptions. The Funds could also be affected by company-specific factors that could jeopardize the generation of free cash flow. Index Funds invest 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. 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 of cash, may adversely affect other shareholders, including potentially increasing capital gains.* Derivatives* may not work as intended and may result in losses. The value of your investment is also subject to geopolitical risks such as wars, terrorism, trade disputes, 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. Diversification does not assure a profit or protect against loss.
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. show less
The Victory Free Cash Flow Growth Index focuses on high quality profitable companies that display a positive free cash flow trend. It selects larger cap companies with the highest free cash flow relative to invested capital that also exhibit higher growth. show less
The Victory International Free Cash Flow Growth Index measures the performance of profitable companies that generate high free cash flow from invested capital and display higher growth characteristics. The index is subject to sector and security weight constraints. The constituents are weighted by modified absolute momentum. show less
VictoryShares ETFs distributed by Victory Capital Services, Inc. (VCS). VCS is not affiliated with VettaFi.
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