Even for investors who carefully select high-conviction stocks, maintaining exposure to the broader market remains essential. A beta sleeve acts as a stabilizing anchor – when individual picks have a bad day, it cushions the blow. It also provides a real-time performance benchmark. If an investor’s stock selections consistently fail to outperform the beta sleeve, it may be a clear signal that the strategy may need reassessment.
Typical Alternatives Don’t Always Hold Up
While fundamental weighting or equal-weighted funds offer a way around this concentration, these options often come with higher turnover and increased fees. An alternative approach is to gain market exposure through a fund that tracks a benchmark but specifically excludes its top holdings. By doing so, these strategies aim to reduce reliance on a handful of mega‑cap stocks and lessen exposure to any single sector.
The S&P 100 Index is a prime example of overconcentration risk. While it follows the same principles as the S&P 500, it is composed of only the 100 largest and most influential stocks. For investors seeking true diversification, this can still mean significant overlap with their existing holdings.
Market Exposure Without The Overconcentration
Home Field Advantage For U.S. Investors
All of the stocks in XOEX are U.S.-based, which means investors don’t have to worry about foreign currency swings. Plus, the fund’s structure helps to limit unnecessary tax events. With an expense ratio of just 0.15%, XOEX remains a low‑cost way to access large‑cap U.S. stocks—while keeping Tech exposure meaningfully smaller than in traditional index funds.
In short, XOEX is designed to fight single-stock or limited-stock overconcentration risk while providing a broad market exposure. Because the high-flying tech titans are out of the mix, the fund leans toward value- and quality-oriented companies that, while still very large, deliver a diversified “Next 80” exposure—rooted in established blue‑chip companies.
Whether you are an investor who already owns the big names in Tech, wants to stay invested in large-cap U.S.-based stocks without the diluting impact of the Mag 7 or thinks the next tier of companies in the S&P 100 are undervalued, this fund may be for you.
To learn more about XOEX and to get started investing, click here.
Featured image from Shutterstock.
This post contains sponsored content. This content is for informational purposes only and is not intended to be investing advice. Read 17(b) disclosure here.
Market News and Data brought to you by Benzinga APIs
© 2026 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
To add Benzinga News as your preferred source on Google, click here.
