VFLO: Q1 2025 Rebalance Swaps 13 Stocks, Preserves Strong Quality And Value

Summary

• VFLO's Index just underwent its quarterly reconstitution, substituting 13 stocks and increasing its exposure to Technology stocks by 5%. The main offset was a decrease in Health Care by 6%.
• Despite the turnover, VFLO's quality and value features remain excellent, and although it's less than two years old, it's building a reputation as a superior alternative to COWZ.
• One factor I'm watching is momentum. Despite not being part of the screening process, VFLO has historically selected high-momentum stocks, but that's no longer the case today.
• I also evaluate VFLO's unique weighting scheme, which cleverly levels the playing field between large- and medium-sized companies without compromising quality and value.
• I'm cautiously optimistic about VFLO and appreciate how it incorporates forward-looking estimates into the process. I keep learning more with each reconstitution, but for today, it remains a solid "hold".

designer491

Investment Thesis

The Victoryshares Free Cash Flow ETF (NASDAQ:VFLO) underwent a quarterly rebalance last week, substituting 13/50 stocks that mainly favored Technology stocks over Health Care stocks. While this turnover seems high, my analysis reveals that VFLO still trades with an 11x

Analyst’s Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.