The VictoryShares Free Cash Flow ETF (VFLO) crossed $5 billion in assets under management (AUM) within the 4th quarter of 2025.* This milestone is remarkable given the fund’s rapid ascent, reaching this scale in less than two and a half years since launching on June 21, 2023.
Additionally, it seems the growth pace has been accelerating. VFLO surpassed $2.0 billion at the beginning of 2025, about 18 months after launch. The recent surge in assets suggests strong and growing investor conviction in free cash flow (FCF) investing.
This ETF’s trajectory highlights a significant shift in investor sentiment, underscoring investors’ focused search for corporate quality and durability.
What’s Driving This Massive Inflow Into VFLO
In an economic environment defined by higher interest rates, sticky inflation, and slowing growth, investors are increasingly prioritizing fundamentals. FCF — the cash a company generates after covering operational expenses and capital expenditures — has become a notable indicator of financial health.
FCF may offer greater transparency than earnings, which can be subject to external forces or influenced by accounting adjustments such as non-cash items, working capital changes, or revenue recognition timing.
Companies that generate high, sustainable FCF may be better positioned to weather economic turbulence. They don’t need to tap into capital markets during challenging conditions. Instead, they have the flexibility to reinvest in their businesses, pay down debt, execute share buybacks, or maintain and grow dividends.
A Rules-Based, Systematic Approach for Quality and Value in the Current Market
VictoryShares believes that strong FCF can be indicative of a high-quality company, and VFLO’s indexed approach is designed to capture companies with this characteristic. VFLO tracks the Victory U.S. Large Cap Free Cash Flow Index (the Index), which considers both trailing and anticipated FCF based on analyst estimates.
A complementary growth filter screens out companies with high FCF but weak expected future growth, which may help drive performance in both value and growth market cycles. The rules-based Index weights companies based on their overall FCF and FCF yield.
In today’s higher-rate environment, the market may be stepping away from rewarding growth at any price. Instead, investors are now seeing value in profitable, self-funding growth. The $5 billion milestone for VFLO isn’t just an asset-gathering story. It reflects a clear and growing demand for investment approaches built on strong FCF fundamentals hinting at a company’s potential versus its current valuation alone. As investors navigate evolving market conditions, FCF strategies have gained momentum, with VFLO serving as one example of these types of ETFs experiencing strong asset growth.
*VFLO reached $5B in AUM as of 10/21/2025.
For more news, information, and analysis, visit the Free Cash Flow Content Hub.
VettaFi LLC (“VettaFi”) is the index provider for VFLO, for which it receives an index licensing fee. However, VFLO is not issued, sponsored, endorsed, or sold by VettaFi, and VettaFi has no obligation or liability in connection with the issuance, administration, marketing, or trading of VFLO.
Disclosure Information
Carefully consider a fund’s investment objectives, risks, charges, and expenses before investing. To obtain a prospectus or summary prospectus containing this and other important information, visit http://www.vcm.com/prospectus. Read it carefully before investing.
All investing involves risk, including the potential loss of principal. The market prices of securities may go up or down, sometimes rapidly or unpredictably, due to general market conditions, such as real or perceived adverse economic, political, or regulatory conditions, recessions, inflation, or changes in interest or currency rates. The Fund has the same risks as the underlying securities traded on the exchange throughout the day. ETFs may trade at a premium or discount to their net asset value. Investing in companies with high free cash flows could lead to underperformance when such investments are unpopular or during periods of industry disruptions. The fund could also be affected by company-specific factors that could jeopardize the generation of free cash flow. Index Funds invest in securities included in, or representative of securities included in, the Index, regardless of their investment merits. The performance of the Fund may diverge from that of the Index. Large shareholders, including other funds advised by the Adviser, may own a substantial amount of the Fund’s shares. The actions of large shareholders, including large inflows or outflows of cash, may adversely affect other shareholders, including potentially increasing capital gains. Investments concentrated in an industry or group of industries may face more risks and exhibit higher volatility than investments that are more broadly diversified over industries or sectors. Investments in companies in the energy sector may be subject to substantial government regulation, as well as risks involving changes in energy prices, international political instability, and liability for environmental damage and accidents resulting in loss of life or property. The profitability of companies in the healthcare sector may be affected by government regulations and healthcare programs, fluctuations in the cost of, and demand for, medical products and services and product liability claims. Derivatives may not work as intended and may result in losses. The Fund may frequently change its holdings, resulting in higher fees, lower returns, and more capital gains. The value of your investment is also subject to geopolitical risks such as wars, terrorism, trade disputes, environmental disasters, and public health crises; the risk of technology malfunctions or disruptions; and the responses to such events by governments and/or individual companies.
The Victory U.S. Large Cap Free Cash Flow Index aims to select high quality companies from its starting universe by applying profitability screens. It then selects companies with the strongest free cash flow yield that exhibit higher growth. The Index is rebalanced and reconstituted quarterly. This Index calculates free cash flow yield by dividing expected free cash flow by enterprise value. Expected free cash flow is the average of trailing 12-month FCF and next 12-month forward free cash flow. Enterprise value (EV) measures a company’s total value, often used as a more comprehensive alternative to equity market capitalization.
You cannot invest directly in an index.
VictoryShares ETFs distributed by Victory Capital Services, Inc. (VCS). VCS is not affiliated with VettaFi.
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