Launched on November 9, 2022, the Xtrackers S&P 100 Ex Top 20 ETF (XOEX Quick QuoteXOEX - Free Report) is a passively managed exchange traded fund designed to provide a broad exposure to the Large Cap Value segment of the US equity market.

The fund is sponsored by Deutsche Bank Ag. It has amassed assets over $202.98 million, making it one of the average sized ETFs attempting to match the Large Cap Value segment of the US equity market.

Why Large Cap Value

Large cap companies usually have a market capitalization above $10 billion. Considered a more stable option, large cap companies boast more predictable cash flows and are less volatile than their mid and small cap counterparts.

While value stocks have lower than average price-to-earnings and price-to-book ratios, they also have lower than average sales and earnings growth rates. Considering long-term performance, value stocks have outperformed growth stocks in almost all markets; however, they are more likely to underperform growth stocks in strong bull markets.

Costs

Since cheaper funds tend to produce better results than more expensive funds, assuming all other factors remain equal, it is important for investors to pay attention to an ETF's expense ratio.

Annual operating expenses for this ETF are 0.15%, making it one of the least expensive products in the space.

It has a 12-month trailing dividend yield of 1.64%.

Sector Exposure and Top Holdings

It is important to delve into an ETF's holdings before investing despite the many upsides to these kinds of funds like diversified exposure, which minimizes single stock risk. And, most ETFs are very transparent products that disclose their holdings on a daily basis.

This ETF has heaviest allocation to the Information Technology sector -- about 23.2% of the portfolio. Healthcare and Financials round out the top three.

Looking at individual holdings, Abbvie Inc (ABBV) accounts for about 2.91% of total assets, followed by Chevron Corp (CVX) and Advanced Micro Dev (AMD).

The top 10 holdings account for about 25.32% of total assets under management.

Performance and Risk

XOEX seeks to match the performance of the S&P 100 EX-TOP 20 SELECT INDEX before fees and expenses. The S&P 100 Ex-Top 20 Select Index measures the performance of companies in the S&P 100, excluding the largest 20 companies as ranked by float market cap.

The ETF has added about 6.87% so far this year. In the past 52-week period, it has traded between $34.77 and $39.01.

The ETF has a beta of 0.86. With about 82 holdings, it effectively diversifies company-specific risk.

Alternatives

Xtrackers S&P 100 Ex Top 20 ETF carries a Zacks ETF Rank of 3 (Hold), which is based on expected asset class return, expense ratio, and momentum, among other factors. Thus, XOEX is a good option for those seeking exposure to the Style Box - Large Cap Value area of the market. Investors might also want to consider some other ETF options in the space.

The Schwab U.S. Dividend Equity ETF (SCHD) and the Vanguard Value Index Fund ETF Shares (VTV) track a similar index. While Schwab U.S. Dividend Equity ETF has $92.59 billion in assets, Vanguard Value Index Fund ETF Shares has $174.74 billion. SCHD has an expense ratio of 0.06% and VTV charges 0.03%.

Bottom-Line

Retail and institutional investors increasingly turn to passively managed ETFs because they offer low costs, transparency, flexibility, and tax efficiency; these kind of funds are also excellent vehicles for long term investors.

To learn more about this product and other ETFs, screen for products that match your investment objectives and read articles on latest developments in the ETF investing universe, please visit Zacks ETF Center.