Nvidia, Apple, Microsoft Unbounded—This ETF By Global X Doesn't Hold Back

Global X ETFs is setting its sights on the big fish, unfiltered and uncapped. The asset manager unveiled today that it is launching its PureCapSM Suite, a new set of five ETFs aimed to offer uncapped access to market capitalization dominators in primary U.S. sectors.

All five ETFs have an expense ratio of 0.25%, providing low-cost investors with a hassle-free way to better approximate the true weight of sector giants in their portfolios. Each fund tracks an MSCI USA sector index, weighted by constituents on a purely market-capitalization basis, without imposing the usual regulatory caps that can dilute performance.

Also Read: A New Kind Of ETF Is Tempting Yield Chasers—With New Trade-Offs

Regulatory caps are constraints on the level of exposure an ETF may have to any one stock, typically capping sector giants like Apple AAPL or Nvidia NVDA at 25% or below to satisfy diversification requirements. This can result in sector ETFs underrepresenting market leaders, producing performance that deviates from the actual sector trend.

One of the new additions is the Global X PureCap MSCI Information Technology ETF GXPT, which mirrors the MSCI USA Information Technology Index. GXPT has the potential to provide investors with complete exposure to technology giants such as Apple, Microsoft MSFT, and Nvidia, whose enormous market capitalizations tend to be underrepresented in regular tech ETFs.

In the meantime, the Global X PureCap MSCI Energy ETF GXPE tracks the MSCI USA Energy Index, providing investors with a direct view of industry leaders such as ExxonMobil XOM and Chevron CVX. Energy stocks have had a bumpy ride recently, making full-cap exposure particularly timely for those who are counting on oil and gas recoveries.

For investors seeking to harness the full strength of American consumer behavior, there are two options: Global X PureCap MSCI Consumer Discretionary ETF GXPD and Global X PureCap MSCI Consumer Staples ETF GXPS. GXPD tracks the MSCI USA Consumer Discretionary Index, and GXPS tracks the MSCI USA Consumer Staples Index, both of which are constructed to have proportionate exposure to the top players in their respective sectors, ranging from car and retail manufacturers to food brands and household products.

Completing the lineup is the Global X PureCap MSCI Communication Services ETF GXPC, which tracks the MSCI USA Communication Services Index and provides investors with uncapped exposure to telecommunication and streaming giants such as Alphabet GOOGL and Meta Platforms META.

Why Go “PureCap”?

Global X states the launch is in answer to growing investor interest in sector-based strategies not burdened by regulatory restrictions. Several sector ETFs are capped to avoid over-weighting a single stock, thereby diluting performance, particularly in sectors where giants tend to dominate.

By following MSCI USA sector indexes that apply pure market capitalization weightings, the PureCap ETFs enable investors to harness the entire power of sector leaders without artificial limits. The funds also apply representative sampling to closely replicate index performance while retaining exposure to leading names.

Global X also boasts the inherent benefits of the ETF wrapper, including tax efficiency, liquidity, and systematic rebalancing, as significant advantages for long-term investors seeking concentrated sector plays.

The PureCap suite complements Global X’s expanding portfolio of thematic, income, and core equity ETFs. With more than $60 billion in assets under management, the company continues to innovate in providing targeted, smart exposure to shifting market dynamics.

• Want To Bet Bigger On UnitedHealth? Now There's A Cheaper Way

Image: Shutterstock