Timothy Plan Free Cash Flow ETF (TPFC)
The Timothy Plan Free Cash Flow ETF (ticker: TPFC) is an exchange-traded fund that combines two selection approaches: it identifies large-cap U.S. companies that generate strong free cash flow — the cash left over after a company pays for the capital spending needed to maintain and grow its business — and screens them through a Christian values-based lens that excludes companies involved in industries or practices the Timothy Plan group deems contrary to Christian teaching.
| What it tracks | Large-cap U.S. companies with strong free cash flow, values-screened |
|---|---|
| Selection method | Free cash flow ranking plus Christian ethical screening |
| Sector exposure | Diversified across sectors, but tilted toward cash-generative businesses |
| Fund sponsor | Timothy Plan |
| Fund structure | Open-ended ETF, no leverage, no daily reset |
| Tax efficiency consideration | Standard equity fund taxation |
Free cash flow as a lens for quality
Free cash flow is the cash a company generates from its core business after spending what it must spend to maintain and grow that business. Unlike accounting earnings, which can be inflated by non-cash charges or one-time items, free cash flow is real money. A company with strong, growing free cash flow has demonstrated that its business model works: it sells products or services people want, and the cash that flows back can be used to pay dividends, buy back shares, reduce debt, or invest in the next phase of growth.
TPFC uses free cash flow as its primary selection signal. The fund ranks companies in the investable large-cap universe by the quantity and trend of their free cash flow and weights them accordingly. This approach targets what value investors call “quality” — companies that are genuinely profitable and durable, not just popular or expensive. A company with strong free cash flow is harder to manipulate with accounting tricks and is less likely to stumble into a crisis because it lacks the cash to meet obligations.
The values-based screening layer
On top of the free-cash-flow ranking, TPFC applies a Christian values-based screening methodology administered by the Timothy Plan organization. The screens exclude companies involved in industries or activities deemed inconsistent with conservative Christian principles. These typically include companies in the alcohol and tobacco sectors, gambling, contraceptive or abortifacient manufacturing, pornography, weapons manufacturing, and some aspects of healthcare (for example, some plans exclude companies providing abortion-related services). The specifics of what is screened out are outlined in the fund’s prospectus.
The screening is systematic and rules-based rather than qualitative. A reader can review the prospectus and the fund’s website to see exactly what sectors and products fall into each exclusion category, and thus what the fund deliberately avoids.
How the portfolio shapes up
The combination of free-cash-flow selection and values-based screening creates a portfolio that is diversified but with a particular character. It will lean toward profitable, cash-generative businesses — consumer staples, established technology, healthcare, and industrials — because these tend to generate strong free cash flow. It will underweight or exclude sectors that are either screened out for values reasons or that are naturally poor free-cash-flow generators (such as capital-intensive, low-margin businesses).
The result is neither a narrow sector fund nor a broad market tracker. TPFC maintains broad sector exposure — it is not all technology or all finance — but it skews toward businesses with durable competitive advantages and strong cash generation. This can mean the fund behaves differently from a plain large-cap index in some market environments. In periods when growth and unprofitable companies rally, TPFC may lag. In periods when profitability and cash flow are valued, it may lead.
Costs and tax considerations
TPFC is a standard open-ended ETF that trades on a public exchange during market hours. Its expense ratio — the annual cost of owning it — is slightly higher than that of a plain index fund tracking the S&P 500, because the fund must maintain the free-cash-flow analysis and the values-based screening process. The exact figure is in the prospectus.
The screening process adds trading activity (as excluded companies are removed and newly qualifying ones are added), which has tax consequences for taxable account holders. An investor should review the fund’s recent capital-gains distributions and turnover rate to understand the tax burden.
The limitations and tensions
One inherent tension is that free cash flow and values-based screening pull in different directions sometimes. A company might generate excellent cash flow but fail the values screen (for instance, an oil major with strong cash returns). Conversely, a company passing the values screen might underperform on free cash flow, which means TPFC will exclude it. The fund resolves this by applying both filters together: only companies that clear both hurdles are held.
Another consideration is that cash flow is backward-looking. A company strong in free cash flow today might face disruption tomorrow. The screen captures profitability at a point in time, not guaranteed durability. An investor in TPFC is betting that companies generating cash today will continue to do so, which is often true but not always.
The values-based screening is also specific to a particular faith tradition. A reader should review the prospectus carefully to understand exactly what the fund excludes and whether those exclusions match their own values. Different Christian investors may disagree on some of the screening criteria.
Researching TPFC
A prospective investor should begin with the fund’s prospectus and fact sheet, available from Timothy Plan. These documents lay out the free-cash-flow methodology (how it is calculated, how often it is updated), the values-based screening criteria in detail, the current expense ratio, and the list of holdings.
Compare TPFC’s returns against a broad large-cap index and against other profitability-focused or values-based ETFs to see whether the dual-screening approach is adding value or simply restricting the opportunity set. A long history of returns (5 years or more) is more informative than recent performance, as the fund’s behaviour in different market regimes becomes visible.
For investors in taxable accounts, review the fund’s recent capital-gains distributions and annual turnover to estimate the tax cost of the screening process. Finally, verify that the values-based screening aligns with your own principles before committing; the specifics matter, and they are not universal across all Christian-values funds.