ETF strategy to ‘X Out’ U.S. companies most likely to be disrupted by technology
NEW YORK–(BUSINESS WIRE)–GraniteShares, an exchange-traded fund (ETF) company, today launches the GraniteShares XOUT U.S. Large Cap ETF (NYSE Arca: XOUT) in collaboration with XOUT Capital™ LLC (XOUT Capital). Tracking the XOUT U.S. Large Cap Index, the ETF aims to exclude U.S. large cap companies most likely to suffer from technological disruption over the long term.
XOUT’s methodology counters traditional investment strategies. Rather than trying to pick a select few winners, XOUT flips the investment paradigm by seeking to avoid losers that are failing to adapt amid today’s environment of unprecedented technological change.
“Disruption is one of the most significant, forward-facing risks impacting investors and companies today”
Innovation is occurring faster than the market can fully appreciate, and no company or sector is immune against this risk. Investors must evaluate which companies in their portfolio are most likely to be disrupted, where those lacking in technological innovation may run the risk of failure, and ultimately, underperformance. XOUT takes the 500 largest U.S. companies and excludes the 250 names deemed most at risk.
Furthermore, XOUT seeks to take advantage of passive investing’s biggest flaw – buying every company in an index, even those in long-term secular decline.
“Disruption is one of the most significant, forward-facing risks impacting investors and companies today,” said David Barse, Founder and CEO of XOUT Capital. “The XOUT approach is simple – look to cut out the losers and you’re left with a portfolio that may be better positioned to outpace the broader market. Having spent most of my career in the asset management industry trying to build portfolios of winners, I now know it may be much easier to simply exclude losers.”
XOUT’s rigorous quantitative framework analyzes a variety of fundamental characteristics, such as revenue growth, employee growth, reinvestment in company stock, earnings sentiment, research and development, management performance and profitability, to identify which companies face the highest risk of being disrupted. Index constituents are re-evaluated on a quarterly basis to accommodate the reality of the rapidly changing investment environment.
“GraniteShares is thrilled to partner with David Barse and XOUT Capital on this unique investment idea,” said Will Rhind, Founder and CEO of GraniteShares. “A first-of-its-kind ETF, XOUT firmly aligns with our mission of offering innovative investment solutions that challenge conventional thinking. With XOUT, more important than what you put in your portfolio is what you leave out.”
XOUT joins GraniteShares’ expanding ETF suite, which includes one of the lowest-cost physical gold ETFs (BAR), two broad-based commodity ETFs (COMB and COMG), the lowest-cost* physical platinum ETF (PLTM) and a high alternative income-focused fund that invests in pass-through securities (HIPS). GraniteShares has experienced robust growth in 2019, recently surpassing $700 million in total assets under management.
XOUT has an expense ratio of 0.60% and trades on the New York Stock Exchange Arca. For additional information, please visit www.graniteshares.com.
GraniteShares is an independent ETF company headquartered in New York City. The firm seeks to launch disruptive ETFs. GraniteShares’ focus is on products that bring the excitement back to investing, using new ideas, innovative structures and low cost. Will Rhind, Founder and CEO, is an established ETF entrepreneur with more than 19 years of experience in the industry.
About XOUT Capital™ LLC
XOUT Capital™ LLC (“XOUT”) is an index company specializing in identifying which companies not to own or “XOUT” in an index. XOUT’s first index, the XOUT U.S. Large Cap Index (ticker: XOUTTR), evaluates the 500 largest U.S. companies and determines how each company is addressing the challenges of technological disruption. While most investors focus on the disruptors, XOUT focuses on eliminating the disruptees.
This material must be preceded or accompanied by a prospectus
Carefully consider the Fund’s investment objectives risk factors, charges and expenses before investing. Please read the prospectus before investing. Investing involves risk; Principal loss is possible.
XOUT is passively-managed and attempts to mirror the composition and performance of the Index. The Fund’s returns may diverge from that of the Index due to costs and expenses incurred by the Fund or holdings may deviate from a precise correlation with the Index. The Index uses proprietary methodology to exclude certain securities and there can be no assurance this will result in positive performance. The Fund may concentrate its investments to the same extent as the index and may be exposed to the risk of loss from adverse developments facing those industries. One cannot directly invest in an index.
Foreside Fund Services, LLC is the distributor of the ETFs and provides marketing services for BAR and PTLM, and is not affiliated with GraniteShares or any of its affiliates.
*Source: ETF.com, September. Trust cost as of most recent prospectus dated April 2, 2019.
Gregory FCA for GraniteShares
Jill Fritz, 215-240-6398