Using Free Cash Flow Across International Value and Growth Equity Investing

Core Insights - The article discusses the significance of free cash flow (FCF) as a flexible metric for international equity investing, especially in the context of global de-dollarization and a weakening dollar [2][4]. Group 1: International Investing Trends - There is a growing interest in international investing as U.S. equities, particularly those focused on artificial intelligence, may have reached peak valuations [2]. - Investors are increasingly looking for value-oriented opportunities outside U.S. borders, making FCF a critical metric for assessing companies' cash deployment capabilities [2]. Group 2: FCF-Driven Investment Strategies - Investors can utilize cash flow statements of international equities to identify opportunities, or they can invest through ETFs like VictoryShares International Free Cash Flow ETF (IFLO) and VictoryShares International Free Cash Flow Growth ETF (GRIN) for diversified exposure [3][4]. - IFLO targets the largest profitable companies with the highest FCF, combining trailing and forward-looking metrics to provide a clearer picture of future cash generation [4]. - GRIN focuses on companies with strong future growth prospects, analyzing their ability to sustain FCF gains over time [5]. Group 3: Portfolio Diversification - Both IFLO and GRIN can be used independently or together to provide comprehensive exposure to international equities, regardless of whether value or growth is currently favored in the market [6]. - A combined portfolio of IFLO and GRIN offers diversification across value and growth factors while leveraging the all-weather FCF metric, beneficial in various market conditions [7].