While traditional investment approaches focus on picking winners, XOUT focuses on avoiding the losers that are being disrupted by technology or secular change.
SAN DIEGO--(BUSINESS WIRE)--EQM Indexes LLC, a developer of unique and disruptive indexes for the exchange traded fund (ETF) marketplace, has collaborated with XOUT CapitalTM LLC (“XOUT”), to create the XOUT (XOUTTR) U.S.Large Cap Index. XOUT’s proprietary quantitative framework looks at multiple factors to identify which companies are being disrupted or disadvantaged by technological innovation and change.
Disruption is an unavoidable challenge for companies across all industries. Successful companies innovate solutions and adapt to the changing economic landscape. Those that do not, are likely to be challenged.
The XOUT approach turns the concept of alpha generation upside down, adopting the investment premise that it is easier to exclude losers, than to pick winners. Starting with a large cap universe of 500 U.S. names, each quarter XOUT eliminates the bottom half of 250 companies being disrupted. Companies demonstrating weak revenue growth, not growing their workforce, not investing in their business and technology, and that continually disappoint investors, are eliminated or X’d OUT.
In recent years, there has been a massive shift toward passive indexing. But to quote XOUT’s founder David Barse, “Does it really make sense to own all the names in the broad market index?” XOUT’s method offers a smarter, more thoughtful approach to index investing.
For more information about a smarter way to index, watch XOUT’s explainer video and read EQM’s White Paper, “TheInvestment Case for XOUT,” visit https://eqmindexes.com.
About EQM Indexes
EQM Indexes LLC is a woman-owned firm dedicated to creating and supporting innovative indexes that track growth industries and emerging investment themes. Co-founded by Jane Edmondson, a former Institutional Portfolio Manager with more than 25 years in the investment industry, our index design expertise spans a wide range of asset classes and financial instruments. We partner with issuers and work jointly with other index firms to provide benchmarks for ExchangeTraded Products (ETPs) such as Exchange Traded Funds (ETFs), Exchange Traded Notes (ETNs), and other similar products. EQM Indexes LLC also assists firms on a fee basis to design and implement their index ideas.
About XOUT CapitalTM LLC
XOUT CapitalTM LLC (“XOUT”) is an index company specializing in identifying which companies not to own or “XOUT” in an index. XOUT’s first index, XOUT U.S. Large Cap Index (ticker: XOUTTR), evaluates the 500 largest US 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.