Overcome Home Country Bias with this Cash-Flow-Focused ETF

When it comes to seeking growth-oriented, profitable companies with a penchant for generating free cash flow (FCF), investors may be missing out on opportunities if they adhere to a home country bias. However, they may be able to overcome this with the right exposure. This is where the VictoryShares International Free Cash Flow Growth ETF (GRIN) might be considered.

GRIN tracks the Victory International Free Cash Flow Growth Index (the Index). This targets high-growth, international large-cap companies with the potential to compound FCF generation over time. The Index incorporates FCF as a forward-looking measure, rather than relying solely on a company’s historical FCF. Companies are first filtered by their FCF trend, then by their FCF to return on invested capital, and lastly by their growth prospects.

When looking for sustainable growth companies, FCF can be a key metric. It can assess a company’s ability to reinvest the excess funds, offer dividends, or buy back stock. All three can contribute to creating shareholder value. GRIN’s indexed approach does this for companies that exhibit these characteristics abroad. By focusing internationally, the Index allows GRIN to help diversify portfolios that may be overly concentrated in U.S. equities.

The Potential to Capture Upside Abroad

At the top of GRIN’s holdings list* is Rolls-Royce Holdings, with a 3.88% allocation. This British aerospace and defense company may see a potential tailwind in European defense companies as military spending ramps up in the European Union. It’s an example of the types of global trends that GRIN may be able to capture if investors begin tilting toward international exposure.

Siemens Energy, a Germany-based company that makes gas turbines, is seeing record orders. This is due to the power demands required by AI. Data centers require huge draws of power in order to run AI applications. Products like these will be crucial as the demand on Europe’s power grid intensifies.

Furthermore, Siemens is one of the top wind power companies in the world, which runs counter to the current political agenda in the U.S. The current administration is halting the buildout of windmills. We believe this is where having a home country bias may cause investors to miss out on the opportunity costs of businesses set to capture future upside in other countries. An example of this is wind power’s use in alternative energy.

Lastly, up nearly 70% for the year as of 8/31/2025, Sea Limited is another top holding in GRIN. The company captures strength in e-commerce and is domiciled in Singapore. In a time of persistent inflation where budgets are constrained in the U.S., Sea Limited is reporting strong sales in Southeast Asia. Again, GRIN allows investors to capture these opportunities abroad when they could be missing out by harboring a home country bias with their portfolios.

Get Global Diversification

For a globally diversified FCF portfolio that captures both U.S. and international equities, investors can consider pairing GRIN with other VictoryShares ETFs. One option is the value-oriented VictoryShares Free Cash Flow ETF (VFLO), which tracks the Victory U.S. Large Cap Free Cash Flow Index. Constituents in the index are high-quality, large-cap U.S. stocks that trade at a discount and have favorable growth prospects.

For those looking to tilt more heavily into the growth factor, consider using the VictoryShares Free Cash Flow Growth ETF (GFLW). The ETF tracks the Victory Free Cash Flow Growth Index, providing exposure to U.S. companies with high FCF profitability with the potential to compound FCF generation over time.

As of 9/24/2025, GRIN held a 3.88% position in Rolls-Royce Holdings Plc., a 3.04% position in Sea Ltd-ADR, and a 3.53% position in Siemens Energy AG.

Holdings are subject to change and should not be construed as investment advice or a recommendation to buy, sell, or hold any security.

For more news, information, and analysis, visit the Free Cash Flow Content Hub.

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Disclosure Information

Carefully consider a fund’s investment objectives, risks, charges and expenses before investing. To obtain a prospectus or summary prospectus containing this and other important information, visit vcm.com/prospectus. Read it carefully before investing.

All investing involves risk, including the potential loss of principal. The Fund has the same risks as the underlying securities traded on the exchange throughout the day and will incur the expenses of the underlying ETFs in which it invests. ETFs may trade at a premium or discount to their net asset value. Index Funds invest in securities included in, or representative of securities included in, the Index, regardless of their investment merits. The performance of the Fund may diverge from that of the Index.

International investments may involve risk of capital loss from unfavorable fluctuation in currency values, from differences in generally accepted accounting principles or from economic or political instability in other nations. The Fund is new with a limited operating history. As a result, it does not have a record of performance or other dealings for prospective investors to evaluate when making investment decisions. Investing in companies with high free cash flows could lead to underperformance when such investments are unpopular or during periods of industry disruptions.

The fund could also be affected by company-specific factors that could jeopardize the generation of free cash flow investments. Large shareholders, including other funds advised by the Adviser, may own a substantial amount of the Fund’s shares. The actions of large shareholders, including large inflows or outflows, may adversely affect other shareholders, including potentially increasing capital gains. The value of your investment is also subject to geopolitical risks such as wars, terrorism, trade disputes, environmental disasters, and public health crises; the risk of technology malfunctions or disruptions; and the responses to such events by governments and/or individual companies.

The Victory International Free Cash Flow Growth Index measures the performance of profitable companies in the developed world, excluding the United States, that generate high free cash flow yield and higher growth characteristics. The indices are subject to sector country and individual security weight constraints. Constituents are weighted by free cash flow modified absolute momentum.

VictoryShares ETFs distributed by Victory Capital Services, Inc. (VCS). VCS is not affiliated with VettaFi.

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