The only thing more important than what you put IN your portfolio is what you XOUT.
XOUT U.S. Large Cap Index (XOUTTR), applies a proprietary quantitative rule-based methodology to identify which of the 500 largest U.S. companies to exclude or “XOUT” from the Index. The Index approach benefits from what it does NOT hold, as opposed to what it owns.
The methodology is driven by one of the largest forward-facing risks impacting all large companies, technological disruption. Each company in the investable universe receives a model score based on quantitatively derived inputs that qualify each company as being qualified or XOUT’d. The quantitative inputs informing the XOUT proprietary model include a combination of factors and/ or signals designed to identify industry and secular disruption being impacted by technological innovation.
Companies scoring in the aggregate below the median quintile in the investable universe are XOUT’d and the remaining names are owned in the Index and re-weighted by market capitalization.