Beyond Market Cap: ETF Strategies That Outperform

**SPEAKER_1** (0:00)
Todd Rosenbluth is with us, Head of Research at TMX Betify. I'm so glad you're with us. We have the 50th anniversary of One Index Fund that people know pretty well. Good afternoon to you. Explain that.

**Todd Rosenbluth** (0:13)
Good to be with you. Good to be with you. Yeah, the Vanguard 500 Fund just turned 50 years old this week, which is a key milestone because we've now seen the ETF version of Vanguard 500
It now has a trillion dollars in assets. It's the most popular ETF this year, again, with over $100 billion of net inflows. It's been popular in August. And we've seen, despite concerns about market concentration, that this fund, as part of the S&P 500, is up 12% give or take for the year. So it's been a great year. It's set the stage for other index innovation from other firms that I'm super excited to talk more about.

**SPEAKER_1** (0:57)
Yeah, and I want to talk about them too. I mean, overall, just to people understand, the demand for ETFs still is huge. Even with market volatility, people are going to ETFs, right? We're looking at another record year, right?

**Todd Rosenbluth** (1:10)
You're right. You're right. We could hit the record real soon. So we finished August with $1.4 trillion of net inflows for the year. Just for perspective, $1.5 trillion was the record that was set in 2025 So this has been a tremendous year. We've got four months to go. The fourth quarter tends to be a strong period as more investors turn to ETFs.
What really has happened is ETFs have become the default vehicle for many advisors and retail investors to get exposure to not only the equity marketplace, but other investments like fixed income, commodities, and even Bitcoin.

**SPEAKER_1** (1:52)
So you mentioned some examples, different examples, of ETFs that are of interest to you and tell us why. Explain some of these.

**Todd Rosenbluth** (2:02)
You're right. So 50 years ago, we saw Vanguard come in with a market cap weighted approach to indexing tied to the S&P 500 We've seen tremendous innovation happening within the indexing world. So you can now have exposure using fundamentals and valuation, and there's some great products that are out there. So Invesco, Rafi, US 1000 ETF, PRF is one of those that takes fundamentals into account as well as valuation. So book value, sales, this is more traditional, how the company is being run as opposed to just how it's being valued.
And PRF has seen strong demand. We've seen that be a very popular product with investors that are getting a value approach to investing. And a second fund that's caught our eye is from Victory Capital. It's the Victory Free Cash Flow ETF, or VFLO, V-F-L-O, excuse me. And what is interesting about this is this fund just turned three years old. It now has about $11 billion.
And VFLO takes a free cash flow growth oriented approach. So it looks for companies that are growing their cash flow.
You get some tech exposure. Salesforce is a top holding. But you get the benefits of diversification with energy and financials. And these are two different ETFs that are taking the original market cap weighted approach and adding a more active management-like twist to it, rebalancing and looking at fundamentals.

**SPEAKER_1** (3:38)
Right, and so what's interesting is you mentioned some of those fundamentals like cash flow.
You know, overall, and so with that, we are seeing these two ETFs actually outperform the S&P 500 and or VOO, right? Because they are now not just market weighted, it's not just following the index, it's picking and choosing those, let's say, with the better cash flow, free cash flow, right? They're outperforming, right?

**Todd Rosenbluth** (4:07)
That's correct. So both these funds are outperforming the S&P 500 They both have a bit of a value tilt to it. They are much more diversified than what you'd get with the S&P 500 with VOO.
And they're rebalanced as opposed to just owning Nvidia and Apple and Microsoft in perpetuity because those companies continue to get larger. Looking at the underlying fundamentals makes a difference.

**SPEAKER_1** (4:33)
You also noted, let's turn our attention over to short-term treasury ETFs. Your thoughts?

**Todd Rosenbluth** (4:41)
Yeah. So we've seen concerns about bond market volatility and whether or not the Fed is going to raise interest rates. That has caused investors to turn towards short-term fixed income ETFs. And so SGOV, S-G-O-V from iShares has been the most popular of those products. But there's a pair of Vanguard ETFs that are short-term focused, that are doing very well in gathering assets.
Also V-Bill is one of them. And what's compelling to me is that you can get a nice stable steady yield. You can stay invested in the fixed income market instead of trying to time it. And we've actually seen short-term treasury ETFs gather as much money this year in 2026 as they did in all of 2025 So fixed income ETFs remain in demand and iShares and Vanguard are among some of those beneficiaries.