VFLO health-care weight is 3.5 points above Russell value index

The VictoryShares Free Cash Flow ETF held 17.22% of assets in health care on Oct. 31, 2026, against 13.69% for the Russell 1000 Value Index. The gap comes from the cash those companies generate under the fund's index rules, rather than from a decision to overweight the sector, according to ETF Trends.

At the latest quarterly reconstitution, 14 of the 75 companies that cleared the free-cash-flow screen were health-care names, second only to Energy. The index VFLO tracks, the Victory U.S. Large Cap Free Cash Flow Index, begins with the 400 largest profitable U.S. companies, excluding financials and real estate investment trusts. It ranks them on expected free cash flow yield, measured as expected free cash flow divided by enterprise value, and sends the top 75 to a growth screen. That screen scores sales trends, EBITDA trends and long-term earnings-per-share estimates, and the 50 highest scorers form the index.

An advisor running VFLO beside a Russell 1000 Value fund is pairing a portfolio with no financials against one where financials are 18.43% of the benchmark. VFLO also holds 18.47 percentage points more energy and 10.76 percentage points more information technology than the benchmark, so the overlap between the two is smaller than the value label suggests. The health-care weight will rise and fall with the reconstitution calendar rather than with a manager's sector call.

Ten of those health-care names made the final 50, carrying an average expected FCF yield of 7.40%, more than double the Russell 1000 Value Index's 3.29%. The calculation runs through enterprise value, or market capitalization plus debt minus cash, rather than market capitalization alone, so a company's borrowings count against it in the ranking. Expected free cash flow is itself an average of trailing 12-month and next 12-month forward figures, which smooths a single year of capital spending or collections.

VFLO carried a forward price-to-earnings ratio of 11.04 against 17.81 for the benchmark, on FactSet's measure as of Oct. 31, 2026. The growth screen is designed to filter out value traps, stocks that look cheap on cash flow but have weakening fundamentals. Micron entered VFLO at a 4.20% weight in the September rebalance, as Private Wealth Daily previously reported.