Unveiling the Power of Free Cash Flow in Portfolio Management

Recorded at the Exchange ETF Conference, host Ryan Nauman welcomes Michael Mack, client portfolio manager at Victory Capital, to discuss key market risks and portfolio implications for financial advisors. Mack highlights concentration risk, noting the “Mag Seven” comprise about 35% of the S&P 500 and can show up unexpectedly across strategies, alongside valuation risk with the market near ~22x earnings. He explains how free cash flow can improve value and growth analysis, including how heavy AI-related CapEx can make Mag Seven look more expensive on free cash flow than earnings. Mack outlines mitigation ideas such as considering small caps, using value strategies that seek meaningful discounts, and applying growth/profitability screens to avoid value traps. He also describes how free-cash-flow ETFs can complement cap-weighted cores, dividend/value funds, and growth allocations by broadening exposure beyond mega-caps. Zephyr can help financial advisors locate the best ETF strategies for their clients. https://informaconnect.com/zephyr/manager-screening/?utm_medium=Content&utm_source=Content_Podcast&utm_campaign=YT_Adjusted_for_Risk_&utm_content=YT_Adjusted_for_Risk Learn more about Victory Capital: https://www.vcm.com/ 00:00 Welcome and Disclosures 00:40 Live at ETF Conference 01:26 Meet Michael Mack 02:23 Victory Capital Overview 03:07 Top Market Risks Today 05:13 Tech Value Opportunities 06:26 Mitigating Valuation Risk 09:29 Why Free Cash Flow Matters 11:25 Using FCF in Value and Growth 14:19 Advisor Portfolio Implementation 17:03 Wrap Up and Resources Connect with Ryan Nauman: LinkedIn: https://www.linkedin.com/in/ryannauman1/ X: https://twitter.com/LkTahoeBadger