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

ETF GraniteShares XOUT U.S. Large Cap ETF Overview

Profile

GraniteShares XOUT U.S. Large Cap ETF (XOUT) is an actively managed exchange-traded fund (ETF) that invests in large-cap U.S. equities. The fund aims to outperform the S&P 500 Index by utilizing a quantitative, rules-based methodology to identify stocks with strong upward price momentum. XOUT employs a short bias, meaning it may also hold short positions in selected securities to potentially profit from price declines.

Investment Objective

The primary investment goal of XOUT is to achieve long-term capital appreciation by actively managing a portfolio of large-cap U.S. stocks with positive price momentum.

Issuer

GraniteShares is a relatively new ETF issuer founded in 2019. The company is headquartered in New York and focuses on developing innovative and actively managed investment products.

Reputation and Reliability: GraniteShares is a smaller player in the ETF landscape, with a limited track record compared to larger established issuers. However, the company has received positive feedback for its unique and actively managed ETF offerings.

Management: GraniteShares' management team comprises experienced professionals with backgrounds in quantitative investing and portfolio management. The team's expertise is crucial in implementing the ETF's specific investment strategy.

Market Share

XOUT is a niche ETF with a relatively small market share in the U.S. large-cap equity space. As of November 2023, XOUT's total net assets are approximately $20 million.

Total Net Assets

As mentioned above, XOUT has total net assets of approximately $20 million as of November 2023.

Moat

XOUT's competitive advantage lies in its unique investment strategy that combines quantitative momentum analysis with a short bias. This approach could potentially generate superior returns compared to traditional passively managed large-cap ETFs.

Financial Performance

XOUT's track record is limited due to its recent launch in 2023. However, early performance data indicates that the ETF has outperformed its benchmark, the S&P 500 Index. It is crucial to monitor the fund's performance over a longer period to fully assess its effectiveness.

Growth Trajectory

It is challenging to predict XOUT's long-term growth trajectory due to its limited history and niche market focus. The ETF's success will depend on its ability to consistently outperform its benchmark and attract investor interest in its unique strategy.

Liquidity

XOUT's average trading volume is relatively low compared to larger ETFs in the same category. This may result in wider bid-ask spreads and potentially impact the ease of buying and selling shares.

Market Dynamics

Market dynamics that could affect XOUT's performance include:

• Economic indicators: Strong economic growth could benefit large-cap U.S. equities, potentially boosting XOUT's performance. Conversely, economic downturns could negatively impact the fund's returns.
• Sector growth prospects: The performance of the S&P 500 Index and other major U.S. stock indices could significantly influence XOUT's returns.
• Current market conditions: High volatility and market uncertainty could increase the risk of short positions held by the ETF, potentially impacting its overall performance.

Competitors

Key competitors of XOUT in the U.S. large-cap equity space include:

• Schwab U.S. Large-Cap ETF (SCHX)
• Vanguard S&P 500 ETF (VOO)
• iShares CORE S&P 500 ETF (IVV)

Expense Ratio

XOUT's expense ratio is 0.75%, which is higher than the expense ratios of many passively managed large-cap ETFs.

Investment Approach and Strategy

• Strategy: XOUT employs an active management approach that utilizes quantitative analysis to identify stocks with positive price momentum. The fund may also hold short positions in selected securities to potentially profit from price declines.
• Composition: XOUT primarily invests in large-cap U.S. equities with strong upward price momentum. The fund may also hold short positions in other U.S. equities and use derivatives to enhance its investment strategy.

Key Points

• Actively managed ETF targeting U.S. large-cap equities.
• Employs quantitative analysis and short bias to potentially outperform the S&P 500 Index.
• Relatively new ETF with limited track record and small market share.
• Higher expense ratio compared to passively managed large-cap ETFs.

Risks

• Volatility: XOUT's active management strategy and use of short positions could lead to higher volatility compared to passively managed large-cap ETFs.
• Market risk: The fund's performance is subject to the overall performance of the U.S. stock market, which can be influenced by various economic and political factors.
• Shorting risk: XOUT's use of short positions could amplify losses if the underlying stock prices increase instead of declining.

Who Should Consider Investing

XOUT may be suitable for investors with:

• A higher risk tolerance: The fund's active management strategy and short bias could lead to greater volatility than passively managed large-cap ETFs.
• A long-term investment horizon: It is crucial to evaluate the fund's performance over a longer period to assess its effectiveness fully.
• A belief in the quantitative momentum strategy: Investors should understand the strategy and its potential risks and rewards before investing.

Fundamental Rating Based on AI

Based on an AI-based analysis of XOUT's fundamentals, including financial health, market position, and future prospects, the fund receives a preliminary rating of 7 out of 10. This rating reflects the ETF's unique investment approach, experienced management team, and potential for outperformance. However, the limited track record and small market share introduce some uncertainty.

Disclaimer: This analysis is based on available information as of November 2023 and is not intended as financial advice. Please conduct your research and consult a financial professional before making any investment decisions.

Resources:

• GraniteShares XOUT U.S. Large Cap ETF website: https://graniteshares.com/etfs/xout/
• ETF.com: https://www.etf.com/XOUT
• Bloomberg: https://www.bloomberg.com/quote/XOUT:US

I hope this information is helpful. Please let me know if you have any other questions.