VictoryShares Small Cap Free Cash Flow ETF

SFLO

Market cap $445M

With the S&P 500 Index pushing to new highs, many advisors are confronting a familiar challenge: how to maintain equity exposure without taking on unnecessary valuation risk.

Growth, growth, and more growth — that's been the common refrain in the current market environment. However, peeking from behind the curtains is the quality factor.

With the S&P 500 posting multiple record highs this year, many investors are questioning whether valuations have peaked—and whether now is the right time to commit new capital. That uncertainty can lead to hesitation or even sitting on the sidelines.

SFLO is a smart-beta ETF that introduces a methodology to eliminate junk equity and value traps. It does this with a quarterly screening of 2,500 small caps, narrowing them down to 200 through a hybrid value + growth philosophy. The result strongly reminds me of the GARP investment style, which I personally appreciate a lot, applied to both small and large caps.

On this episode of the “ETF of the Week” podcast, VettaFi's Head of Research, Todd Rosenbluth, discusses the VictoryShares Small Cap Free Cash Flow ETF (SFLO) with Chuck Jaffe of Money Life. The pair discusses several topics related to the fund to give investors a deeper understanding of the ETF.

VettaFi's Head of Research Todd Rosenbluth discussed the VictoryShares Small Cap Free Cash Flow ETF (SFLO) on this week's “ETF of the Week” podcast with Chuck Jaffe of “Money Life.” For more news, information, and analysis visit VettaFi | ETFDB.

People might be shocked to learn the Mag 7 are not in a bubble. The PEGY ratio of 0.9 to 1.0 confirms Morningstar's fair value estimate. However, you might be even more shocked to discover that value is having an incredible rally this year, with stocks like Realty Income beating the Mag 7. Accelerating EPS growth, combined with falling interest rates (which enhance the profitability of value stocks) and AI-fueled margin expansion, could cause this value rally to persist for years.

As the Federal Reserve's rate cuts become more likely to begin in September, investors may shift their focus back to U.S. small-cap ETFs. Many of these funds have been out of favor in 2025, as large-cap counterparts have captured significant investor attention.

The VictoryShares Small Cap Free Cash Flow ETF (SFLO) was met with intriguing changes to its portfolio composition following a recent rebalance. SFLO tracks the Victory U.S. Small Cap Free Cash Flow Index (the Index), which captures high-quality small-cap companies.

Investors seeking equity diversification would do well to consider the VictoryShares Small Cap Free Cash Flow ETF (SFLO). The approach focuses on free cash flow (FCF) yield and creates a differentiated portfolio from value benchmarks.