Behind the ETFs: VFLO, TTEQ, and the Strategies Driving Them

In this episode, Nate Geraci sits down with Lance Humphrey of Victory Capital and Dom Rizzo of T. Rowe Price to unpack why free cash flow has become the cornerstone of modern quality investing. Victory Shares now offers 23 ETFs, managing roughly $21 billion, with the flagship VFLO (Victory Shares Free Cash Flow ETF) holding over $6.5 billion. The hosts argue that profitability combined with attractive pricing—captured through free cash flow yield—offers a more reliable gauge of corporate health than traditional book‑value metrics, especially in today’s AI‑driven economy where balance‑sheet size can be misleading.

Humphrey explains VFLO’s systematic, rules‑based construction, emphasizing forward‑looking analyst consensus to estimate free cash flow rather than relying solely on backward‑looking 10‑K data. The process first screens the 75 most attractively valued stocks by blended free cash flow yield, then removes 25 that lack growth potential, preserving a 50‑stock portfolio that stays roughly 50 % discounted to the broader market while boosting expected growth by 3‑5 %. Quarterly rebalancing and a 4 % cap per holding keep the fund diversified and unemotional, sidestepping the common pitfall of value traps.

The conversation shifts to TTEQ, T. Rowe Price’s technology ETF, which differentiates itself by holding private‑market players such as OpenAI and Anthropic. Rizzo frames TTEQ as an “all‑weather tech” strategy, balancing exposure to high‑growth private innovators with more established public tech names. In a climate of elevated valuations and geopolitical uncertainty, both VFLO and TTEQ illustrate how rule‑driven, cash‑flow‑focused frameworks can provide defensive upside while navigating volatile tech valuations. Investors seeking a blend of quality, systematic discipline, and unique tech exposure should consider these ETFs as core or satellite holdings in diversified portfolios.