The VictoryShares Small Cap Free Cash ETF has recently caught the attention of investors, boasting a notable rise of almost 10% over the past year. This growth aligns with the impressive performance of the Russell 2000, which tracks the small-cap group and has climbed approximately 17% over the same period. Since January 1, the ETF is up nearly 10%, and over the past 52 weeks, it has surged more than 49%. Experts are now turning their gaze to this ETF as it continues to outperform amidst economic uncertainties.
The ETF's mission statement emphasizes its strategy to target "quality small-cap companies, trading at a discount with favorable growth prospects." The top three holdings in the ETF—Royalty Pharma, Oscar Health, and Jazz Pharmaceuticals—underscore its focus on firms with robust growth potential. According to Todd Rosenbluth of VettaFi, the VictoryShares Small Cap Free Cash ETF is poised to thrive under what is being dubbed "Trump 2.0."
"If we have a focus on the U.S. and making America even stronger, then small-cap companies stand to benefit from that because they have less multinational exposure." – Todd Rosenbluth
The ETF has been designed to track small-cap companies with strong free cash flow, selecting holdings based on factors such as free cash flow, earnings growth, and other financial metrics. The ETF is expected to remain insulated from reshoring and tariff threats, making it an attractive option for investors looking to capitalize on the small-cap sector.
John Davi, during his appearance on CNBC's "ETF Edge," highlighted the strategic advantage of focusing on banks within this context.
"The funny thing about the banks is that they were actually from an earnings standpoint fundamentally getting very attractive prior to the Trump administration." – John Davi
Rosenbluth further suggests alternative investment vehicles such as the T. Rowe Price Small-Mid Cap ETF and Neuberger Berman Small-Mid Cap ETF for those interested in exploring different perspectives within the small-cap market.
"takes a focus on companies with high quality, strong free cash flow generation, but it has a growth filter to it." – Todd Rosenbluth
The ETF's top holdings also include financial powerhouses like JPMorgan, Goldman Sachs, and Morgan Stanley, according to FactSet. This diverse portfolio provides investors with an opportunity to delve into small-cap stocks while mitigating risks associated with broader market volatility.
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