GFLW fund adds AI focused tech companies
The VictoryShares Free Cash Flow Growth ETF (GFLW) tracks the Victory Free Cash Flow Growth Index, which selects companies based on their free cash flow (FCF) from invested capital. As of September 30, 2026, the Russell 1000® Growth Index had a weighted-average market capitalization of over $2 trillion, with more than half of its holdings in Information Technology.
The GFLW fund’s September 2026 portfolio adjustments included swapping out 12 of its 100 investments, with nine of the new additions coming from tech firms focused on AI infrastructure. Among the new picks were storage providers Seagate Technology Holdings (STX) and Western Digital (WDC).
GFLW’s Rebalance and Holdings
The fund evaluates companies based on their free cash flow return on invested capital (FCF ROIC), which assesses how well they convert capital into liquid assets. GFLW’s current investments have shown stronger FCF conversion over the past five years compared to its benchmark index.
After the September rebalance, Seagate was allocated a 2.19% stake and Western Digital a 2.11% share by September 18, 2026. Netflix (NFLX) and Keysight Technologies (KEYS) also featured prominently among the largest new positions, at 2.00% and 1.35% respectively.
The 12 deletions came mostly from outside Information Technology, with Hecla Mining Company (HL), ResMed Inc. (RMD), and Coca-Cola Consolidated, Inc. (COKE) being the largest. The portfolio’s sector weights shifted, with Health Care rising from 15.83% to 17.56% and Communication Services increasing from 5.40% to 7.17%.
Since the rebalance, the fund’s FCF ROIC improved from 46.21% to 47.92%, while its forward price-to-earnings ratio nudged up slightly from 23.0 to 23.3. This suggests the fund now favors firms that generate more cash from their operations, albeit at a marginally higher valuation.
Comparison to the Russell 1000® Growth Index
On average, GFLW’s holdings were significantly smaller in size compared to the Russell 1000® Growth Index, with a market cap roughly one-fifth that of the benchmark. The fund also held larger allocations in Health Care and Industrials while reducing exposure to Information Technology and Communication Services.
The Index’s focus on cash flow explains why GFLW added nine tech companies in September despite holding about 11 percentage points less in the sector than the benchmark. Since selection prioritizes cash efficiency over market size, the fund’s tech exposure spans storage, hardware, and semiconductor equipment rather than just the largest tech firms.
The Victory Free Cash Flow Growth Index begins with the VettaFi 1000 Index, eliminates firms with five years of declining free cash flow, and excludes Financials and Real Estate sectors. It then picks 100 companies based on FCF ROIC and a growth metric that combines sales trends, EBITDA performance, and long-term earnings per share projections.
As of September 30, 2026, Seagate Technology Holdings Public Limited Company was among the top 10 holdings in GFLW, according to publicly available data.
The Index rebalances quarterly, with the next rebalance scheduled for December 18, 2026, at market close. The Russell 1000® Growth Index is a market-capitalization-weighted index that measures the performance of Russell 1000® Index companies with higher price-to-book ratios and higher forecasted growth values.
GFLW’s Index selects holdings by ranking companies on FCF ROIC and a growth score. The growth score combines trends in sales and earnings before interest, taxes, depreciation, and amortization with long-term earnings per share growth estimates.
The Index starts by filtering the VettaFi 1000 Index to exclude companies with poor five-year cash flow trends and remove Financials and Real Estate. This approach helps identify firms that efficiently generate free cash flow while also showing strong growth potential.
The VettaFi 1000 Index represents the 1,000 largest U.S. stocks.
