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

Overview

The GraniteShares XOUT U.S. Large Cap ETF (XOUT) is designed to provide investors with exposure to U.S. large-cap equities by excluding companies with certain characteristics, aiming for a potentially more concentrated portfolio. It focuses on large-capitalization U.S. stocks and employs an investment strategy that seeks to identify and invest in companies that meet specific criteria, rather than passively tracking a broad index.

Reputation and Reliability

GraniteShares is a relatively newer entrant in the ETF space, founded by Will Rhind, a former executive at iShares. While it may not have the same long-standing reputation as larger, established ETF providers, it has focused on offering differentiated products with competitive expense ratios. Its reliability is demonstrated through its adherence to ETF structures and regulatory compliance.

Management Expertise

The management team at GraniteShares, led by its founder, brings experience from the ETF industry. While specific individual fund managers for XOUT might not be publicly highlighted, the firm's strategy is typically overseen by experienced investment professionals within GraniteShares, focusing on their proprietary methodology.

Goal

The primary investment goal of the GraniteShares XOUT U.S. Large Cap ETF is to seek to provide investment results that, before fees and expenses, correspond generally to the performance of the GraniteShares XOUT U.S. Large Cap Index. This index methodology focuses on excluding certain companies based on specific criteria.

Investment Approach and Strategy

Strategy: The ETF aims to track a proprietary index, the GraniteShares XOUT U.S. Large Cap Index. This index employs a unique strategy of excluding companies that engage in certain business activities, such as share buybacks or dividends, or those that have poor ESG scores, aiming to create a portfolio of companies with different financial characteristics or growth profiles. This is not a traditional broad-market index tracking strategy.

Composition The ETF primarily holds large-capitalization U.S. equities. The composition is determined by the exclusion criteria of its underlying index, meaning it will hold a subset of large-cap U.S. stocks that meet the index's positive screening criteria and do not fall into its exclusion categories.

Market Share: Specific, up-to-the-minute market share data for niche ETFs like XOUT can be difficult to ascertain precisely without access to real-time proprietary data. However, it operates in the highly competitive U.S. large-cap equity ETF space, where its market share is likely small compared to dominant broad-market ETFs.

Total Net Assets (AUM): Information on the Total Net Assets (AUM) for the GraniteShares XOUT U.S. Large Cap ETF fluctuates and is best obtained from real-time financial data providers. As of recent data, its AUM is in the tens of millions of dollars, indicating it is a smaller ETF within its category.

Key Competitors

• Vanguard Total Stock Market ETF (VTI)
• iShares Core S&P 500 ETF (IVV)
• Invesco QQQ Trust (QQQ)
• SPDR S&P 500 ETF Trust (SPY)

Competitive Landscape

The U.S. large-cap equity ETF market is extremely crowded and highly competitive, dominated by massive funds tracking broad indices like the S&P 500 and total stock market. GraniteShares XOUT's advantage lies in its differentiated, exclusionary strategy, which appeals to investors seeking an alternative to traditional indexing. Its disadvantages include its smaller AUM, potentially lower liquidity compared to giants, and the need to educate investors on its unique methodology, which may not resonate with all passive investors.

Historical Performance: Historical performance data for XOUT shows varied results across different time periods. As of recent data, its year-to-date, one-year, and three-year performance figures indicate periods of both outperformance and underperformance relative to broad market benchmarks, reflecting the impact of its specific screening methodology. Specific numerical data requires real-time access and is subject to change.

Benchmark Comparison: The ETF's performance is benchmarked against the GraniteShares XOUT U.S. Large Cap Index. While direct comparison to broad indices like the S&P 500 is common, XOUT's strategy is designed to deviate. Its performance relative to the S&P 500 can vary significantly depending on which excluded companies outperform or underperform.

Expense Ratio: 0.17

Average Trading Volume

The GraniteShares XOUT U.S. Large Cap ETF generally exhibits moderate average trading volume, which can influence the ease and cost of executing trades.

Bid-Ask Spread

The bid-ask spread for XOUT is typically competitive, reflecting its inclusion in the broader U.S. large-cap equity market, though it may be wider than that of the largest, most liquid ETFs.

Market Environment Factors

The ETF is influenced by broad macroeconomic trends affecting the U.S. equity market, including interest rates, inflation, corporate earnings, and geopolitical events. Its exclusionary strategy means it may be less sensitive to broad market momentum and more influenced by the performance of companies that meet its specific inclusion criteria, such as those with strong balance sheets or specific growth initiatives.

Growth Trajectory

The growth trajectory of XOUT is tied to investor adoption of its unique exclusionary strategy. As investors increasingly seek diversification beyond traditional market-cap weighted indices, funds like XOUT may see growth. Any changes in its strategy or holdings would be dictated by adjustments to the GraniteShares XOUT U.S. Large Cap Index methodology.

Competitive Edge

The primary competitive edge of the GraniteShares XOUT U.S. Large Cap ETF lies in its distinct investment strategy. By employing a proprietary exclusionary methodology, it offers investors an alternative to traditional broad-market index funds, potentially providing exposure to a more curated selection of large-cap U.S. companies. This unique approach can appeal to investors seeking to avoid specific company characteristics or to align their investments with particular financial or ethical considerations. Its competitive expense ratio also adds to its appeal.

Volatility

The historical volatility of XOUT can be expected to be similar to that of other large-cap U.S. equity ETFs, though its concentrated nature might lead to slightly higher or lower volatility depending on the performance of its selected constituents.

Market Risk

The ETF is subject to market risk, which is the risk that the overall stock market or the specific sectors in which the ETF's holdings are concentrated will decline in value. Additionally, the exclusionary screening methodology introduces a specific risk: if the excluded companies outperform the included companies, the ETF may underperform broader market benchmarks.

Ideal Investor Profile

The ideal investor for XOUT is someone seeking exposure to U.S. large-cap equities but wants to deviate from standard market-cap weighted indices. This could include investors who are interested in companies that are actively reinvesting profits, have strong balance sheets, or are looking to avoid certain business practices or ESG concerns, as defined by the index methodology.

Market Risk

XOUT is best suited for investors who understand and agree with its exclusionary screening methodology and are looking for a passive investment vehicle with a differentiated approach to the U.S. large-cap market. It may appeal to long-term investors seeking a specific exposure rather than active traders looking for short-term price movements.

The GraniteShares XOUT U.S. Large Cap ETF (XOUT) offers a differentiated approach to U.S. large-cap equity investing by excluding specific companies based on a proprietary methodology. Its goal is to track the GraniteShares XOUT U.S. Large Cap Index, providing exposure to a curated selection of large U.S. companies. While operating in a highly competitive market, XOUT's unique strategy and competitive expense ratio make it an option for investors seeking an alternative to traditional index funds. Investors should consider its specific methodology and potential deviation from broad market performance.

Data Sources:

• GraniteShares Official Website
• Financial Data Providers (e.g., ETF.com, Morningstar, Bloomberg - data points are illustrative and subject to real-time updates)

Disclaimers:

This information is for informational purposes only and does not constitute investment advice. ETF holdings, performance, AUM, and other data are subject to change. Investors should conduct their own due diligence and consult with a financial advisor before making investment decisions.