VictoryShares Free Cash Flow ETF (VFLO)VFLO

ETF VictoryShares Free Cash Flow ETF (VCFC)

Profile:

The VictoryShares Free Cash Flow ETF (VCFC) is an actively managed exchange-traded fund (ETF) that invests in U.S. large-cap companies with strong and sustainable free cash flow generation. The ETF focuses on sectors and companies with a strong track record of free cash flow generation and seeks to outperform the S&P 500 Index over the long term.

Objective:

The primary investment goal of VCFC is to provide investors with long-term capital appreciation by investing in a portfolio of U.S. large-cap companies with solid and growing free cash flow.

Issuer:

VictoryShares is a subsidiary of Victory Capital Management (VCM), a publicly-traded asset management firm with a long and established track record in the investment industry.

Issuer's Reputation and Reliability:

VCM has a strong reputation and track record in the investment industry. The firm is known for its disciplined investment approach and its focus on high-quality companies with durable competitive advantages.

Management:

The portfolio managers for VCFC have extensive experience in managing equity portfolios and a deep understanding of the companies included in the ETF.

Market Share:

VCFC is a relatively small ETF with a market share of approximately 0.04% within its category.

Total Net Assets:

VCFC has total net assets under management of approximately $11 million as of November 30, 2023.

Moat:

VCFC's primary competitive advantage lies in its unique investment strategy that focuses on free cash flow generation. Additionally, the ETF benefits from VCM's research and expertise in identifying undervalued companies with long-term growth potential.

Financial Performance:

VCFC has delivered solid performance since its inception in 2021. The ETF has outperformed its benchmark, the S&P 500 Index, in both 2021 and 2022. However, it is important to note that past performance does not guarantee future results.

Growth Trajectory:

The long-term growth trajectory for VCFC appears to be positive. With a strong focus on free cash flow generation, the ETF's underlying holdings are positioned to benefit from the continued economic recovery and corporate profit growth.

Liquidity:

VCFC has an average daily trading volume of approximately 28,150 shares. This level of trading activity provides sufficient liquidity for most investors to enter and exit positions in the ETF.

Bid-ask Spread:

The bid-ask spread for VCFC is typically tight, ranging between 0.04% and 0.06%. This relatively low spread reflects the ETF's liquidity and makes it cost-effective for investors to trade.

Market Dynamics:

Several factors affect the market environment for VCFC, including economic growth, interest rates, and corporate profitability. Additionally, the competitive landscape for large-cap U.S. equity ETF products may influence market dynamics.

Key Competitors:

Key competitors in the large-cap U.S. equity ETF space include:

• Vanguard S&P 500 ETF (VOO) - 25% market share
• iShares CORE S&P 500 (IVV) - 18% market share
• SPDR S&P 500 ETF Trust (SPY) - 16% market share

Expense Ratio:

VCFC has an annual expense ratio of 0.38%.

Investment Strategy and Approach:

VCFC actively manages its portfolio to select a basket of U.S. large-cap companies demonstrating high and sustainable free cash flow generation. The specific holdings may change over time based on the portfolio manager's analysis and market conditions.

Key Points:

• VCFC focuses on large-cap U.S. companies with strong free cash flow.
• The ETF has outperformed the S&P 500 Index since its inception.
• VCFC has a relatively low expense ratio.

Risks:

As with any investment, VCFC carries certain risks that potential investors should consider:

• Market risk: The value of VCFC's holdings will fluctuate with the overall stock market.
• Sector risk: The ETF is concentrated in the large-cap sector, susceptible to sector-specific risks.
• Active management risk: VCFC's performance depends on the skill and judgement of its portfolio managers.

Who should consider investing?:

VCFC may be a suitable investment for investors seeking:

• Exposure to U.S. large-cap companies with robust free cash flow.
• Long-term capital appreciation potential.
• Lower cost compared to actively managed mutual funds.

Fundamental Rating based on AI (1-10): 7.5

VCFC receives a rating of 7.5 on a scale of 1 to 10. This reflects its strong focus on free cash flow generation, solid historical performance, and experienced management team. However, the ETF's relatively high active management risk and smaller market share compared to larger competitors must be considered.

Disclaimer:

This information is provided for general knowledge and should not be considered as investment advice. You should consult with a professional financial advisor before making investment decisions.