WBI Investments, LLC recently disclosed a substantial sale of shares in the VictoryShares Free Cash Flow ETF (VFLO), trimming its holdings by 82,398 shares according to a filing updating their Q3 positions with the Securities and Exchange Commission. This transaction lowered WBI’s aggregate stake in VFLO to 160,664 shares, representing a valuation of approximately $6.02 million based on closing prices. This adjustment caused VFLO’s representation within the investment firm's portfolio to decrease from 1.77% to 1.54% of total assets under management (AUM) compared to the previous quarter.
Despite the reduction, VFLO remains a significant component of WBI’s portfolio, ranked within the top five holdings by proportion of AUM. The largest positions in WBI’s portfolio as recorded in the filing include WBIY at $24.10 million (6.2% of AUM), WBIL at $20.95 million (5.4%), WBIG at $20.85 million (5.3%), WBIF at $18.35 million (4.7%), with VFLO trailing as the fifth largest holding around $6 million, representing around 1.5% of the total portfolio.
Examining market data as of late December 2025, shares of VFLO were priced at $39.80, marking a 16.3% gain over the prior 12 months. The ETF’s official market close price as of November 19, 2025, was noted as $37.32. The fund also offers an annual dividend yield of approximately 1.57% and a one-year total return—including dividends—of approximately 18.3%, reflecting competitive performance relative to broad benchmarks.
The VictoryShares Free Cash Flow ETF is constructed to track a proprietary index consisting of 50 U.S. large- and mid-cap stocks selected primarily through their strong free cash flow attributes. Utilizing a methodology that screens for companies demonstrating substantial free cash flow yield, the ETF targets firms that combine ample free cash generation with attractive growth potential. This approach is systematic and rules-based, designed to provide transparency and discipline in stock selection, with expense ratio specifics outlined in regulatory submissions.
VFLO's portfolio begins with a universe of the largest 400 profitable companies, subsequently applying a free cash flow yield filter to narrow the universe to around 75 high-yield value stocks. Further refinement removes companies lacking favorable growth prospects, culminating in a focused basket of 50 stocks characterized by both robust free cash flow yield and growth potential. This curated exposure aims to deliver institutional investors a blend of income and growth through a replicative investment strategy closely aligned with its underlying custom index.
Regarding the recent transactional activity, the reduction of shares by WBI Investments likely represents portfolio rebalancing decisions rather than a targeted divestment attributable to diminished confidence in VFLO's future performance. The total returns generated by the ETF, inclusive of dividends, have outperformed the S&P 500 during the current year, potentially motivating WBI to realize gains from the position.
For investors contemplating portfolio allocations, VFLO offers a compelling option by providing concentrated exposure to companies that generate substantial free cash flow, typically indicative of corporate health and flexibility. Strong free cash flow allows companies to return capital to shareholders through dividends and share buybacks, reduce leverage, or invest in growth initiatives, all of which are strategies that can enhance shareholder value over the long term.
Given this, VFLO has the potential to function as a cornerstone holding within diversified portfolios. Investors emphasizing companies with enduring free cash flow generation coupled with growth prospects may find the ETF an attractive vehicle. As always, understanding the fund’s methodology, costs, and underlying holdings is critical to ensuring alignment with individual investment goals and risk tolerance.
Key Points
- WBI Investments reduced its VFLO holding by approximately 82,000 shares, lowering its allocation to 1.54% of total assets under management while retaining VFLO as a top five portfolio holding.
- The VictoryShares Free Cash Flow ETF targets U.S. large- and mid-cap firms exhibiting high free cash flow yields coupled with solid growth prospects, resulting in a portfolio of 50 select companies.
- VFLO has demonstrated competitive performance, delivering an 18.3% total return over the past year, including dividends, outperforming major indexes in the same period.
Risks and Uncertainties
- While the ETF screens for companies with high free cash flow yield and growth, it remains subject to market volatility and sector-specific risks inherent to large- and mid-cap equities.
- Changes in economic conditions or disruptions affecting the free cash flow generation capacity of portfolio companies could adversely affect the ETF's performance.
- Investment returns are impacted by fees and expenses; although the fund employs a rules-based methodology, these costs may affect net investor returns.