ETF outperforms S&P 500 by 11.34% in first year by seeking to eliminate losing stocks; Accumulates $78 million in assets
NEW YORK, Oct. 07, 2020 (GLOBE NEWSWIRE) -- The GraniteShares XOUT U.S. Large Cap ETF (NYSE Arca: XOUT), an award-winning smart beta equity ETF launched by GraniteShares and XOUT Capital®, celebrates one year on the market.
Since inception, XOUT has gathered more than $78 million in assets under management (AUM). The ETF is up 27.90% compared to the S&P 500 Index’s 16.56% return since fund launch, resulting in an outperformance of 11.34%. This outperformance validated XOUT’s investing thesis of eliminating vulnerable companies amid the economic quagmire of the COVID-19 pandemic.
Launched on Oct. 7, 2019, XOUT takes a novel approach to passive ETF investing by seeking to avoid losers being disrupted by technological innovation, rather than picking winners. The XOUT methodology examines the 500 largest U.S. companies and excludes the bottom 250 stocks deemed most at risk using a rules-based, quantitative-driven framework.
Across four quarters of performance, the top 10 eliminated stocks from XOUT collectively underperformed the market by 23.67%. Consistently X’ed OUT stocks included AT&T, Chevron, Coca-Cola, Exxon and Verizon. The three largest detractors of shareholder value in 2020 were J.P. Morgan, Exxon and Wells Fargo, together eradicating over $435 billion in value — XOUT successfully protected investors from owning these lagging stocks during its 2020 investment window. The elimination of these three stocks alone enabled investors to outperform the market by 1.52% year-to-date.
“Technological adaptiveness before the pandemic was simply a competitive advantage,” said David Barse, Founder and CEO of XOUT Capital. “Now, it has become an absolute necessity for companies to succeed in the short and long term. By avoiding lagging companies, XOUT outperformed the broader market and taken substantially less risk in the process.”
The ETF outpaced the S&P 500 by the greatest extent in down markets as leaving out the stock market’s worst offenders dampened volatility. XOUT reduced the February/March stock market drawdown by 2% while recovering its previous highs two months earlier than the market overall.
“We are pleased XOUT’s innovative and intuitive investment strategy has struck a chord with investors who are seeking both alpha generation and downside protection,” said Will Rhind, Founder and CEO of GraniteShares. “With one year under its belt, XOUT has shown that what you leave out of your portfolio may be more important than what you put in.”
Earlier this year, XOUT was named the “Best New Smart Beta ETF” as part of the 2019 ETF.com Awards. This accolade recognizes the “most important” smart beta or factor ETF brought to market in 2019 that uses a quantitative, research-driven approach to attempt to deliver superior long-term, risk-adjusted returns.
For more information on XOUT or GraniteShares, please visit www.graniteshares.com.
About GraniteShares
Headquartered in New York City, GraniteShares is an independent and fully funded exchange-traded fund (ETF) company that 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 20 years of experience in the industry.
About XOUT Capital®
XOUT Capital® (“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.
Media contact:
Gregory FCA for GraniteShares and XOUT Capital®
Jill Fritz, 484-832-7034
graniteshares@gregoryfca.com
Important Information
Performance data quoted represents past performance and is no guarantee of future results. Current performance may be lower or higher than the performance data quoted. Investment return and principal value will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than original cost. For the fund’s most recent month end performance, please call 1(844) 476-8747. For standardized returns, click here.
Investors should consider the investment objectives, risks, charges and expenses carefully before investing. For a prospectus or summary prospectus with this and other information about the Fund, please call (844) 476 8747 or visit the website at www.graniteshares.com. Read the prospectus carefully before investing.
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.
The XOUT U.S. Large Cap Index utilizes a proprietary, quantitative methodology developed by XOUT Capital, LLC designed to identify companies that have a risk of being disrupted and as a result could underperform their relevant sector. The companies identified are then excluded from the index selection. There is no guarantee the index will be successful in excluding companies that are at risk of being disrupted or possibly underperform their relevant sector. Exclusion or inclusion of a security within the index is not a recommendation or solicitation to buy, hold or sell any security.
The S&P 500 index measures the performance of 500 large companies listed on U.S. stock exchanges
Past performance does not guarantee future returns. One cannot invest directly in an index.
Foreside Fund Services, LLC is the distributor of the Fund, and is not affiliated with GraniteShares or any of its affiliates.