SFLO ETF

Advisors and investors choose quality stocks for different reasons during various market conditions. They may use them to reduce risk, improve portfolio diversity, or find steady income, as quality stocks fit well with many investment approaches.

The VictoryShares Small Cap Free Cash Flow ETF (SFLO) has seen interesting changes to its top holdings and sector weights. SFLO offers exposure to high-quality small-cap companies trading at a discount with favorable growth prospects and high expected free cash flow (FCF) yields.

VictoryShares Small Cap Free Cash Flow ETF (SFLO) targets profitable small-cap companies with strong free cash flows, offering attractive valuations compared to the Russell 2000 index. SFLO's methodology excludes financials and REITs, focusing on companies with high free cash flow yields and positive growth outlooks, rebalanced quarterly. SFLO's sector allocation is heavily weighted towards energy and consumer discretionary, with low price/FCF and price/earnings ratios, providing a valuation cushion.

SFLO is a Buffett-style ETF focused on small-cap value stocks with strong free cash flow yields and growth potential. The ETF targets companies with 12% to 13% consensus growth rates, trades at 5X cash-adjusted earnings, and offers almost 10% FCF yields. SFLO aims to provide potentially explosive upside returns by investing in undervalued small-cap companies with strong growth prospects.

Markets remain highly responsive to economic data as concerns around Fed policy and high interest rates dominate the second quarter so far.

Investors might be interested in small- and mid-cap companies for their potential value and growth opportunities, making them a worthy investment consideration.

Investors have shown ongoing interest in VictoryShares' free cash flow ETFs, with the VictoryShares Free Cash Flow ETF (VFLO) and VictoryShares Small Cap Free Cash Flow ETF (SFLO) receiving strong interest and healthy flows in February 2024.

Investors who are underexposed to small-cap stocks may be missing out on compelling growth potential. Many investors avoid small caps, unaware they can mitigate some unwanted risk by focusing on companies with attractive free cash flow yields.