GraniteShares XOUT U.S. Large Cap ETF (XOUT)

Overview

The GraniteShares XOUT U.S. Large Cap ETF (XOUT) aims to provide investment results that, before fees and expenses, generally correspond to the price and yield performance of the Nasdaq US Large Cap Ex-Tech Index. It focuses on excluding companies perceived to be disrupted or outdated by innovation, primarily in the large-cap segment of the US equity market. The fund employs a quantitative, rules-based strategy.

Reputation and Reliability

GraniteShares is a smaller ETF provider, known for its innovative and thematic ETFs. Their reputation is growing, although they are less established than larger issuers.

Management Expertise

The management team at GraniteShares demonstrates expertise in quantitative investing and ETF management, focusing on thematic and factor-based strategies.

Goal

The ETF's goal is to outperform the broad large-cap market by excluding companies deemed likely to be negatively impacted by technological disruption and innovation.

Investment Approach and Strategy

Strategy: XOUT aims to track an index (Nasdaq US Large Cap Ex-Tech Index) that excludes companies identified as being susceptible to disruption based on a proprietary scoring model.

Composition The ETF primarily holds stocks of large-cap U.S. companies, excluding those identified as vulnerable to disruption based on the index methodology. It invests in various sectors excluding most technology names.

Market Share: XOUT's market share within the large-cap disruption-focused ETF space is relatively small but growing.

Total Net Assets (AUM): 467000000

Key Competitors

• SPDR S&P 500 ETF Trust (SPY)
• Invesco QQQ Trust (QQQ)
• iShares Russell 1000 ETF (IWB)

Competitive Landscape

The large-cap ETF market is dominated by broad-market index funds. XOUT differentiates itself through its disruption-avoidance strategy, which is a niche offering. While competitors focus on broad market exposure, XOUT provides a targeted approach, potentially offering higher growth but also introducing concentration risk compared to broader funds.

Historical Performance: Historical performance needs to be evaluated over a reasonable period (e.g., 3-5 years) relative to its benchmark and peers. Data unavailable for direct inclusion due to real-time variations. Please consult financial data providers for current values.

Benchmark Comparison: The ETF's performance should be compared to both broad large-cap indexes (e.g., S&P 500) and other disruption-focused or factor-based ETFs.

Expense Ratio: 0.25

Average Trading Volume

The average trading volume is moderate, offering sufficient liquidity for most retail and institutional investors.

Bid-Ask Spread

The bid-ask spread is typically tight, reflecting reasonable liquidity and efficient trading.

Market Environment Factors

Economic growth, interest rates, inflation, and technological innovation all influence the performance of XOUT and its underlying holdings. Specific sector growth and disruptive trends are particularly important.

Growth Trajectory

The ETF's growth is dependent on investor interest in its unique disruption-avoidance strategy and the relative performance of its excluded stocks versus included stocks. Changes to the index methodology could impact its investment profile.

Competitive Edge

XOUT's competitive edge lies in its unique, proprietary methodology for identifying and excluding companies vulnerable to disruption, allowing investors to avoid potentially underperforming stocks. This approach differentiates it from traditional market-cap-weighted indexes, offering a targeted strategy for investors concerned about technological change. The fund provides a way to participate in large-cap growth while mitigating disruption risk, appealing to investors seeking a more defensive large-cap allocation. Finally, the relatively low expense ratio enhances its appeal to cost-conscious investors.

Volatility

XOUT's volatility will depend on the market conditions and the specific stocks it holds and excludes. It may exhibit different volatility characteristics than broad-market indexes.

Market Risk

Market risk includes overall economic downturns, sector-specific risks related to its holdings, and the risk that its disruption-avoidance methodology may not accurately predict underperformance. Additionally, there is the risk that excluded stocks will outperform the remaining portfolio.

Ideal Investor Profile

The ideal investor is someone who believes in the power of technological disruption and wants to avoid companies potentially negatively impacted by it, while still maintaining large-cap exposure. Investors who anticipate long-term technological shifts would find this suitable.

Market Risk

XOUT is suitable for long-term investors who are looking for a different approach to large-cap investing, with a focus on avoiding disruption rather than passively tracking a broad index.

GraniteShares XOUT U.S. Large Cap ETF is a unique ETF designed to exclude large-cap companies susceptible to technological disruption. It offers a targeted approach to large-cap investing, aiming to outperform by avoiding potential laggards. The ETF is best suited for investors who believe in the ongoing impact of disruption and want to construct a portfolio that mitigates this risk. Its performance depends on the effectiveness of its proprietary scoring model and the evolving market dynamics. Investors should consider the potential for both outperformance and tracking error compared to traditional large-cap benchmarks.

Data Sources:

• GraniteShares Website
• ETF.com
• Morningstar
• Bloomberg

Disclaimers:

This analysis is based on available information and is not financial advice. Past performance is not indicative of future results. Investors should consult with a financial advisor before making investment decisions. Market share data is approximate and may vary.