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Private Wealth Daily
NewsETFsPassive & Indexing

VictoryShares SFLO cuts tech to 20.6% in small-cap rebalance

The index's expected free cash flow yield rose to 10.72% and the forward P/E fell to 9.7.

10.72%Expected FCF yield of SFLO's index after rebalance

By the Passive & Indexing desk3 min read

At a glance

  1. The rebalance lifted the index's expected free cash flow yield to 10.72% from 10.08%.
  2. Advisors using SFLO as a small-cap value substitute get a portfolio with no financials, real estate or utilities.
  3. Consumer discretionary and industrials accounted for 29 of the index's 45 additions.

The VictoryShares Small Cap Free Cash Flow ETF (SFLO) cut information technology to 20.58% of the index from 29.47% at the September 2026 quarterly rebalance, the largest sector shift of that re-rank, ETF Trends reported.

The rebalance lifted the index's expected free cash flow yield to 10.72% from 10.08%. The forward price-to-earnings ratio fell to 9.7 from 10.1, and growth eased by 0.18 to 2.69 percentage points.

Advisors using SFLO as a small-cap value substitute get a portfolio with no financials, real estate or utilities. Those sectors made up 42.85% of the Russell 2000 Value Index as of Sept. 30, 2026, when SFLO traded at 9.7 times forward earnings against 15.8 for that benchmark.

Consumer discretionary and industrials accounted for 29 of the index's 45 additions. Consumer discretionary added 16 names and rose to 18.16% from 10.73% of the index. Industrials added 13 and rose to 14.39% from 12.88%. The largest additions were Toll Brothers (TOL), Deckers Outdoor (DECK) and Talos Energy (TALO), which entered at a 1.11% weight. Qualys (QLYS), Five9 (FIVN) and CCC Intelligent Solutions (CCC) dropped out.

The index re-ranks its eligible universe every quarter, so a company that fails the free cash flow screen exits at the next rebalance rather than through a discretionary trade.

Tech gave way to consumer and industrials

Index sector weights before and after the September 2026 rebalance, % of index

  • Before
  • After
  • Information technology29.47% → 20.58%
  • Consumer discretionary10.73% → 18.16%
  • Industrials12.88% → 14.39%
Source: VettaFi and FactSet via ETF Trends
Show as table
ItemBeforeAfterChange
Information technology29.47%20.58%−8.89%
Consumer discretionary10.73%18.16%+7.43%
Industrials12.88%14.39%+1.51%

Reported by the Passive & Indexing desk from ETF Trends. Published . Corrections

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