Victory Capital has expanded its free cash flow (FCF) ETF suite with the addition of two international products.
The VictoryShares International Free Cash Flow ETF (IFLO) and the VictoryShares International Free Cash Flow Growth ETF (GRIN) launched on June 26, 2025. The two FCF ETFs use the same disciplined rules-based index methodology as Victory Capital’s existing FCF ETFs, while offering investors a distinct opportunity in international markets. IFLO and GRIN provide investors the ability to build globally diversified FCF driven portfolios when combined with other FCF ETFs from VictoryShares.
FCF is considered a key indicator of a company’s financial health and efficiency, representing the cash available after operating expenses and capital expenditures. A positive FCF suggests a company can sustain operations and potentially return value to shareholders.
The two new ETFs join Victory Capital’s suite of FCF ETFs, which includes the VictoryShares Free Cash Flow ETF (VFLO ), the VictoryShares Small Cap Free Cash Flow ETF (SFLO ), and the VictoryShares Free Cash Flow Growth ETF (GFLW).
Under the Hood of the International FCF ETF
IFLO seeks to provide investment results that track the performance of the Victory International Free Cash Flow Index (IFLO Index), which selects 100 companies from the VettaFi Developed Market Ex US Index (excluding financial and real estate companies) based on a rules-based methodology. This index focuses on non-U.S. developed market companies with high FCF yields, a valuation metric that compares FCF to enterprise value.
The selection process begins with the VettaFi Developed Market Ex US Index, removing financial and real estate firms. Companies with negative projected FCF or earnings are then excluded. The remaining companies are ranked by their FCF yields. From there, a growth score, based on sales trend and EBIDTA growth, is calculated for the top 150 companies. The final IFLO Index includes the 100 companies with the highest growth scores.
The IFLO Index employs a rules-based weighting system that assigns higher weights to companies with stronger FCF attributes, considering both total FCF and FCF yield.
International Growth Exposure Founded on FCF
GRIN seeks to provide investment results that track the performance of the Victory International Free Cash Flow Growth Index (GRIN Index). This GRIN Index uses a rules-based approach to offer exposure to non-U.S. developed markets growth companies with positive FCF.
The GRIN Index selection process begins with the VettaFi Developed Market Ex US Index, excluding financial and real estate companies.
For inclusion in the GRIN Index, companies must demonstrate a positive FCF growth trend over the past five years. Additionally, a high FCF profitability measure, defined as FCF return on invested capital, is needed. Companies with negative projected FCF, earnings per share (EPS), or a negative FCF growth trend are removed.
The remaining companies are ranked by their FCF profitability. A growth score is then determined for the top 150 companies based on sales trend and EBIDTA growth. The final portfolio consists of 100 companies with the highest growth scores.
Finally, the GRIN Index is weighted based on a combination of total FCF and absolute momentum. Absolute momentum is the absolute value of a company’s trailing 12-month, risk-adjusted total return and accounts for the magnitude of price fluctuations.
More Details on IFLO & GRIN
For both ETFs’ underlying indexes, companies’ cap at 4% of the index. Furthermore, sector weightings are limited with no single sector exceeding 45% of the index or 20% of its weight in the parent index. The indexes are rebalanced and reconstituted quarterly.
Additionally, IFLO and GRIN are each managed by Mannik Dhillon, CFA®, CAIA®, president, Investment Franchises and Solutions, Lance Humphrey, head of portfolio management, VictoryShares and Solutions, and Lela Dunlap, head of implementation and portfolio manager, VictoryShares and Solutions.
IFLO and GRIN each have a net expense ratio of 0.56% after any fee waivers and expense reimbursements. IFLO’s gross expense ratio is 1.05% and GRIN’s gross expense ratio is 1.06%.
Read more on VictoryShares’ latest ETFs launch here.
Net expense ratios reflect the contractual waiver and/or reimbursement of management fees through October 31, 2026.
For more news, information, and analysis, visit the Free Cash Flow Channel
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 www.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. 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. 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 value of your investment is also subject to geopolitical risks such as wars, terrorism, 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. To facilitate commencement and/or growth of the Fund, seed investors, such as the Fund’s Adviser or one of its affiliates, a lead market maker, Authorized Participant, or other entity may contribute all or most of the assets in the Fund. If a seed investor redeems its shares, it could negatively impact the Fund’s NAV, market price and brokerage costs.
Fund holdings and sector allocations are subject to change, may differ from the Index, and should not be considered investment advice.
The Victory International Free Cash Flow Index aims to select high quality companies from its starting universe by applying profitability screens. It then selects companies with the strongest free cash flow yield that exhibit higher growth. The Index is rebalanced and reconstituted quarterly. This Index calculates free cash flow yield by dividing expected free cash flow by enterprise value. Expected free cash flow is the average of trailing 12-month FCF and next 12-month forward free cash flow. Enterprise value (EV) measures a company’s total value, often used as a more comprehensive alternative to equity market capitalization.
The MSCI World ex USA Value Index captures large and midcap securities exhibiting overall value style characteristics across Developed Markets countries. The value investment style characteristics for index construction are defined using three variables: book value to price, 12-month forward earnings to price and dividend yield.
The Victory International Free Cash Flow Growth Index measures the performance of profitable companies that generate high free cash flow from invested capital and display higher growth characteristics. The index is subject to sector and security weight constraints. The constituents are weighted by modified absolute momentum.
The MSCI World ex USA Growth Index captures large and midcap securities exhibiting overall growth style characteristics across Developed Markets (DM) countries — excluding the United States. The growth investment style characteristics for index construction are defined using five variables: long-term forward EPS growth rate, short-term forward EPS growth rate, current internal growth rate and long-term historical EPS growth trend and long-term historical sales per share growth trend
VictoryShares ETFs are distributed by Victory Capital Services, Inc (VCS). VCS is not affiliated with VettaFi.
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VettaFi LLC (“VettaFi”) is the index provider for VFLO, SFLO, GFLW, IFLO, and GRIN for which it receives an index licensing fee. However, VFLO, SFLO, GFLW, IFLO, and GRIN are 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 VFLO, SFLO, GFLW, IFLO, and GRIN.
