XOEX captures the performance of S&P 100 companies ranked 21-100 by market cap, essentially giving you large-cap exposure minus the mega-cap tech giants that dominate traditional indices. This creates a more balanced large-cap portfolio without the concentration risk of having Apple, Microsoft, and their peers eating up 30%+ of your allocation.
How It Works
The fund takes the S&P 100 index and surgically removes the top 20 holdings, then equal-weights the remaining 80 companies. This mechanical approach transforms what would normally be a top-heavy index into something more democratic — your 80th largest holding gets the same weight as number 21. Rebalancing happens quarterly to maintain equal weights and adjust for any changes in the S&P 100 composition.
Key Features
- Equal-weighted construction gives you 1.25% in each stock vs traditional cap-weighting concentration
- Completely free with 0.00% expense ratio — cheaper than building this yourself
- Captures large-cap beta without the tech oligopoly that drives most index returns
Risks
- Missing the top 20 means you'll lag badly when mega-caps lead — could underperform S&P 500 by 5-10% annually
- Equal weighting creates higher turnover and potential tax drag vs cap-weighted alternatives
- Zero AUM since 2022 launch suggests potential delisting risk — check liquidity before buying
Who Should Own This
Perfect for investors who think the market's mega-cap concentration has gone too far but still want large-cap exposure. Works as a satellite holding alongside traditional index funds to reduce single-stock risk, or as a core position for those betting on a rotation away from the biggest tech names. The zero expense ratio makes it compelling for long-term holders who can stomach tracking error versus the S&P 500.