Core Insights - A weakening U.S. dollar is prompting a shift towards international equities as investors seek better opportunities abroad [1] - Valuations in domestic markets are perceived as stretched, further encouraging this transition to international investments [1] Group 1 - The VictoryShares International Free Cash Flow Growth ETF (GRIN) is highlighted as a potential beneficiary of this trend towards international equities [1]

Core Insights - The S&P 500 Index is reaching new highs, prompting advisors to seek ways to maintain equity exposure while managing valuation risks. Free cash flow (FCF) is highlighted as a crucial metric for identifying high-quality investment opportunities in the current market environment [1][2]. Group 1: Importance of Free Cash Flow - Free cash flow is emphasized as a tool to navigate elevated valuations and concentration in mega-cap growth stocks, particularly in the context of rising AI-related capital expenditures [2][5]. - Companies with strong and sustainable cash generation are positioned for long-term growth, enhancing portfolio resiliency [2]. - Historical trends show a cyclical dominance of growth and value, with current allocations being 23% towards growth and 15% towards value [3]. Group 2: FCF Mechanics and Evaluation - The evaluation of FCF involves analyzing cash flow relative to enterprise value, aiming to identify companies with attractive valuations based on profitability [8][16]. - Key metrics include FCF yield and return on invested capital (ROIC), which provide a comprehensive measure of profitability [8]. Group 3: FCF ETF Strategies - Victory Capital offers several ETFs focused on FCF, including: - VictoryShares Free Cash Flow Growth ETF (GFLW), which targets U.S. companies with high FCF profitability [9]. - VictoryShares Free Cash Flow ETF (VFLO), focusing on large-cap U.S. stocks with favorable growth prospects [9]. - VictoryShares Small Cap Free Cash Flow ETF (SFLO), investing in profitable small-cap companies with high FCF yields [9]. - International options include VictoryShares International Free Cash Flow ETF (IFLO) and VictoryShares International Free Cash Flow Growth ETF (GRIN) [10]. Group 4: FCF Strategy in Market Conditions - A FCF strategy is deemed beneficial during economic slowdowns, as companies with substantial cash reserves can better withstand downturns compared to those heavily invested [11]. - The flexibility of FCF ETFs makes them suitable for various market environments, supporting the diversification of portfolios [11][12].

Core Insights - The S&P 500 Index is reaching new highs, prompting advisors to seek ways to maintain equity exposure while managing valuation risks. Free cash flow (FCF) is highlighted as a crucial tool for identifying high-quality investment opportunities in the current market [1][2]. Group 1: Importance of Free Cash Flow - Free cash flow is essential for cutting through market noise characterized by high valuations and concentration in mega-cap stocks, particularly in the context of rising AI-related capital expenditures [2][5]. - Companies with strong and sustainable cash generation are positioned for long-term growth, enhancing portfolio resiliency [2]. - Historical trends show that growth and value investing come in cycles, with current allocations being 23% towards growth and 15% towards value [3]. Group 2: FCF Mechanics and Evaluation - The evaluation of FCF involves analyzing a company's cash flow relative to its enterprise value, aiming to identify companies with attractive valuations based on profitability [8][16]. - Key metrics include FCF yield and return on invested capital (ROIC), which provide a comprehensive measure of profitability [8]. Group 3: FCF ETF Strategies - Victory Capital offers several ETFs focused on FCF, including: - VictoryShares Free Cash Flow Growth ETF (GFLW), which targets U.S. companies with high FCF profitability [9]. - VictoryShares Free Cash Flow ETF (VFLO), focusing on large-cap U.S. stocks with favorable growth prospects [9]. - VictoryShares Small Cap Free Cash Flow ETF (SFLO), investing in profitable small-cap companies with high FCF yields [9]. - International options include VictoryShares International Free Cash Flow ETF (IFLO) and VictoryShares International Free Cash Flow Growth ETF (GRIN) [10]. Group 4: FCF Flexibility and Market Resilience - A FCF strategy is beneficial during economic slowdowns, as companies with substantial cash reserves can better withstand market downturns [11]. - The emphasis on diversifying portfolios with a focus on free cash flow is recommended for navigating various market conditions [12].

Core Insights - The S&P 500 has reached multiple record highs, leading to investor concerns about whether valuations have peaked and if it is the right time to invest new capital [1] - Victory Capital emphasizes the importance of free cash flow (FCF) as a metric to identify high-quality businesses in elevated-valuation markets [1][2] Free Cash Flow ETFs - Victory Capital has launched a suite of ETFs focused on FCF, including the flagship VictoryShares Free Cash Flow ETF (VFLO), which tracks the Victory U.S. Large Cap Free Cash Flow Index [2] - The VFLO Index targets high-quality, large-cap companies with attractive valuations and solid growth prospects [2][12] Valuation Risks - Current market conditions present valuation risks, with stock prices showing a disconnect from fundamental metrics [3] - Investors are encouraged to mitigate valuation risks by investing in stocks with high free cash flow [3] Growth Factor and FCF - Research indicates that combining growth with FCF can enhance investment effectiveness [4] - The VictoryShares Free Cash Flow Growth ETF (GFLW) provides exposure to U.S. companies with high FCF profitability and growth potential [3][4] International Opportunities - With the dollar's weakness and other macroeconomic factors, investors are increasingly looking at international equities [5] - Victory Capital has introduced the VictoryShares International Free Cash Flow ETF (IFLO) and the VictoryShares International Free Cash Flow Growth ETF (GRIN) to expand access to high-quality, high FCF companies globally [5][6] Diversification Strategy - The suite of FCF ETFs allows investors to build a diversified portfolio, including small-cap exposure through the VictoryShares Small Cap Free Cash Flow ETF (SFLO) [6] - Research supports the appeal of FCF across various regions and asset classes, promoting a diversified investment approach based on FCF [7]

Core Insights - Investors may overlook growth-oriented, profitable companies generating free cash flow (FCF) due to home country bias, but can benefit from international exposure through the VictoryShares International Free Cash Flow Growth ETF (GRIN) [1] Group 1: ETF Overview - GRIN tracks the Victory International Free Cash Flow Growth Index, targeting high-growth, international large-cap companies with potential for compounding FCF generation over time [2] - The Index uses FCF as a forward-looking measure, filtering companies based on FCF trends, FCF to return on invested capital, and growth prospects [2] Group 2: Importance of FCF - FCF is a key metric for assessing sustainable growth companies, indicating their ability to reinvest, offer dividends, or buy back stock, all contributing to shareholder value [3] - GRIN's indexed approach focuses on international companies exhibiting these characteristics, helping diversify portfolios concentrated in U.S. equities [3] Group 3: Notable Holdings - Rolls-Royce Holdings, a British aerospace and defense company, is a top holding in GRIN with a 3.88% allocation, potentially benefiting from increased military spending in the EU [4] - Siemens Energy, a German company, is experiencing record orders due to power demands from AI applications, crucial for Europe's power grid [5] - Siemens is also a leading wind power company, contrasting with the U.S. political agenda, highlighting missed opportunities for investors with a home country bias [6] - Sea Limited, based in Singapore, has seen a nearly 70% increase in value for the year as of 8/31/2025, capitalizing on e-commerce strength in Southeast Asia [7] Group 4: Diversification Strategies - For global diversification, investors can pair GRIN with other VictoryShares ETFs, such as the value-oriented VictoryShares Free Cash Flow ETF (VFLO), which focuses on high-quality, large-cap U.S. stocks [8] - The VictoryShares Free Cash Flow Growth ETF (GFLW) provides exposure to U.S. companies with high FCF profitability and growth potential [9]