SFLO ETF

SFLO uses a strategy focused on free cash flow in the small-cap equity market. This leads to a reasonably priced mix of small and mid-sized companies that are heavily invested in cyclical sectors like energy and industrials, while also emphasizing quality. However, the main issue is that its growth potential is weak, even though it is better than CALF's, which is still not very impressive in the current market.

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 experienced notable shifts in its main holdings and sector allocations. SFLO provides access to strong small-cap firms that are undervalued and have promising growth potential, along with high expected free cash flow (FCF) yields.

The VictoryShares Small Cap Free Cash Flow ETF (SFLO) aims to invest in small-cap companies that are profitable and have strong free cash flows, presenting good value compared to the Russell 2000 index. It avoids financials and REITs, concentrating on firms with high free cash flow yields and positive growth potential, and is rebalanced every three months. SFLO mainly invests in the energy and consumer discretionary sectors, featuring low price-to-free cash flow and price-to-earnings ratios, which offers a safety net in terms of valuation.

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.