The VictoryShares International Free Cash Flow Growth ETF (GRIN) tracks an index that is built on a rigorous methodology that identifies non-U.S. companies with a positive free cash flow (FCF) trend and high levels of profitability. It focuses on businesses that generate high FCF relative to their invested capital. By tracking an index, GRIN captures high-quality, large-cap growth companies with the potential to compound FCF generation over time across global markets.
With the S&P 500 Index near record highs, investors worried about U.S. equity valuations peaking can diversify with international equities. To identify value outside of U.S. borders, GRIN tracks an Index that uses a simple yet effective FCF screener.
How the Index Screens for Free Cash Flow Quality
GRIN tracks the Victory International Free Cash Flow Growth Index (the Index), which focuses on companies with strong FCF metrics. FCF is the cash a company has left after all operating expenses, interest, taxes and CapEx. Because CapEx reduces FCF immediately but does not appear on the income statement, FCF captures capital intensity in a way that earnings may not. With FCF, companies can buy back shares, pay dividends, or invest in the company to build shareholder value. The Index’s methodology extends the FCF approach beyond U.S. equities.
The Index screens constituents on FCF Return on Invested Capital (ROIC): expected FCF divided by invested capital. Expected FCF blends trailing 12-month free cash flow with forward 12-month estimates, giving the Index a forward-looking lens that backward-looking screens lack. The ratio measures how efficiently a company turns capital into spendable cash.
At the end of this strict screening process, the companies left exhibit strong, sustainable cash generation. This quality may enhance portfolio resilience while positioning clients for potential long-term growth. The Index’s approach targets international large-cap growth companies that are profitably growing, because sales growth alone isn’t quality. Quality growth requires that revenue translate into actual cash flow.
5 International Innovators Powering GRIN
These five holdings illustrate the types of businesses the Index’s FCF ROIC screen surfaces: established international companies with efficient capital use and durable cash generation.
- Siemens Energy AG: As the world shifts toward a decentralized and decarbonized power grid, the Index surfaces companies exposed to grid modernization and energy-transition CapEx. Siemens Energy’s focus on grid technologies and gas services positions the company for this energy transition.
- ASML Holding N.V.: The lithography giant is a key player in the semiconductor industry as the sole provider of the EUV (Extreme Ultraviolet) machines required to produce the world’s most advanced chips. This position gives the company the potential to maintain high margins and robust cash generation.
- Tokyo Electron Ltd.: Another major player in the global semiconductor industry, Tokyo Electron provides the essential equipment for wafer processing. As AI-driven demand forces chipmakers to expand capacity globally, Tokyo Electron can benefit from this capacity buildout.
- Barrick Gold Corp: In the current environment of sticky inflation and geopolitical uncertainty, gold miners may offer a safe haven hedge. Barrick’s operational efficiency and disciplined capital allocation have helped the company generate FCF despite changes in gold prices.
- Fujikura Ltd.: A leader in optical fibers and electronic components, this company has been one on the forefront of the worldwide 5G rollout and data center expansion. Fujikura’s transition toward higher-value-added products may help fuel its FCF in the future. (Held at a 1.95% weight as of 7/6/2026)
GRIN provides exposure to high-quality international large-cap growth companies selected for FCF strength. For investors looking to diversify their portfolios with an international equity ETF, GRIN may provide a compelling option.
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VettaFi LLC (“VettaFi”) is the index provider for GRIN, for which it receives an index licensing fee. However, GRIN is not issued, sponsored, endorsed, or sold by VettaFi, and VettaFi has no obligation or liability in connection with the issuance, administration, marketing, or trading of GRIN.
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. ETFs may trade at a premium or discount to their net asset value. The market prices of securities may go up or down, sometimes rapidly or unpredictably, due to general market conditions, such as real or perceived adverse economic, political, or regulatory conditions, recessions, inflation, or changes in interest or currency rates. International investments can be more volatile than the U.S. market due to increased risks of adverse issuer, political, regulatory, market, or economic developments and can perform differently from U.S. investments. 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. 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. 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. 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 of cash, 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.
©2026 Victory Capital Management Inc. All Rights Reserved.
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Facts Only
* GRIN tracks an index of non-U.S. companies with a positive free cash flow (FCF) trend and high profitability.
* The index focuses on businesses generating high FCF relative to invested capital.
* The screening uses FCF Return on Invested Capital (ROIC), which is expected FCF divided by invested capital, blending trailing 12-month FCF with forward 12-month estimates.
* Index constituents exhibit strong, sustainable cash generation based on this screening process.
* Five holdings are: Siemens Energy AG, ASML Holding N.V., Tokyo Electron Ltd., Barrick Gold Corp, and Fujikura Ltd.
* Siemens Energy AG is positioned for grid modernization and energy-transition CapEx.
* ASML Holding N.V. is a provider of EUV lithography machines in the semiconductor industry.
* Tokyo Electron Ltd. provides equipment for wafer processing in the semiconductor industry.
* Barrick Gold Corp's efficiency generated FCF despite gold price changes.
* Fujikura Ltd. is involved in optical fibers and electronic components related to 5G rollout.
Executive Summary
The VictoryShares International Free Cash Flow Growth ETF (GRIN) tracks an index composed of non-U.S. companies exhibiting positive free cash flow (FCF) trends and high profitability, focusing on businesses that generate significant FCF relative to their invested capital. The index methodology uses Free Cash Flow Return on Invested Capital (ROIC), calculated by blending trailing 12-month FCF with forward 12-month estimates, to assess how efficiently a company converts capital into spendable cash. This approach screens for high-quality, large-cap growth companies across global markets.
The index currently features five specific holdings: Siemens Energy AG, ASML Holding N.V., Tokyo Electron Ltd., Barrick Gold Corp, and Fujikura Ltd. These selections illustrate companies involved in sectors like energy transition, semiconductors, mining, and electronics, which are positioned for future growth based on FCF strength. The fund aims to diversify U.S. equity exposure by targeting international firms demonstrating sustainable cash generation.
Full Take
The mechanism of quality selection through FCF ROIC—using forward-looking cash flow projections blended with historical data—establishes a framework for identifying operational efficiency that moves beyond simple revenue growth signals. This methodology implies that the true metric for quality in growth equity is not top-line expansion but the ability to generate and deploy capital effectively across international boundaries. The selection of specific holdings like ASML and Tokyo Electron highlights a focus on infrastructure and foundational technology enablers, suggesting an investment thesis rooted in long-term, capital-intensive global trends rather than cyclical market movements.
The reliance on FCF as a proxy for quality is a powerful structural assumption; it posits that the ability to fund growth internally (via FCF) is a more reliable indicator of business health than accounting metrics alone when assessing international opportunities. However, the limitations surface in defining "high-quality" across diverse global regulatory and economic environments. The pattern observed suggests an attempt to apply a consistent, quantitative filter (FCF ROIC) onto qualitative geopolitical themes (energy transition, semiconductor capacity). The implication is that investors are being guided toward global industrial segments where capital intensity remains high, regardless of macroeconomic volatility.
What if the definition of 'invested capital' or 'expected FCF' varies significantly between, for example, a heavy asset miner like Barrick and a technology equipment provider? This raises questions about cross-sector comparability when using a unified screening ratio. Furthermore, the focus on international markets introduces inherent volatility risks that must be weighed against the potential for superior compounding growth identified through this specific quality lens. How does the index manage the divergence between the smooth performance of established leaders (like ASML) and those in nascent, high-transition areas (like Siemens Energy)?