Three free-cash-flow ETFs shift into energy, industrials

VictoryShares carried out changes in three free-cash-flow exchange-traded funds in its most recent portfolio rebalance. The affected funds are the VictoryShares Free Cash Flow ETF (VFLO), the Free Cash Flow Growth ETF (GFLW) and the International Free Cash Flow ETF (IFLO).

VFLO, the largest of the three with more than $7 billion in assets, tracks the Victory U.S. Large Cap Free Cash Flow Index, which emphasizes forward-looking free cash flow in its rules-based selection. The fund increased exposure to U.S. energy by adding Devon Energy (target weight about 3.71%), Exxon Mobil (2.92%) and ConocoPhillips (2.31%). It also added T-Mobile (2.47%) and Intuit (3.00%) and removed Dell Technologies, Delta Air Lines, Humana, ON Semiconductor and General Motors.

GFLW follows the Victory Free Cash Flow Growth Index, a screen that selects companies by free cash flow relative to return on invested capital. New entries include Caterpillar (about 3.41%), Dell Technologies (2.70%) and Royalty Pharma (1.97%). The fund exited consumer retail holdings such as Ross Stores (previously about 1.92%), The TJX Companies (1.62%) and Ralph Lauren (1.12%).

IFLO, the international free-cash-flow ETF, ranks global companies using both trailing and forward-looking free cash flow metrics. The rebalance increased stakes in Canadian energy companies including Suncor Energy (about 2.21%), Canadian Natural Resources (1.88%) and Imperial Oil (1.56%), and added SAP SE (about 1.69%). The fund reduced or removed prior positions such as Shell PLC (about 3.03%), Recruit Holdings (2.13%), Renesas Electronics (1.93%) and Flex Ltd. (1.84%).

All three funds use free-cash-flow screening to select and weight holdings rather than relying solely on recent price performance. VettaFi LLC serves as the index provider for VFLO, GFLW and IFLO and receives an index licensing fee; VettaFi is not the issuer, sponsor or seller of the ETFs and has no responsibility for their management or trading.

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