Exchange-traded fund sponsor GraniteShares is so positive that a negative screening approach employed by a U.S. large-cap stock index is a winning formula that it packaged it into the GraniteShares XOUT U.S. Large Cap ETF (XOUT), which launched today on the NYSE.

The product’s underlying XOUT U.S. Large Cap Index is the first product developed by XOUT Capital LLC, an index company that says it specializes in identifying which companies not to own—or to “XOUT”—in an index.

Technological advances are disrupting many industries, and investors are seeking to hitch their wagons to the so-called disruptors in hopes of striking it rich. XOUT Capital takes a different tack on this same trend by saying its value-add is based on what it doesn’t own—and not on what it owns.

The XOUT fund’s index uses a quantitative rules-based methodology to identify which of the 500 largest U.S. companies to avoid based on their potential to be disrupted by technological and secular trends. Each company in this initial universe gets evaluated on various fundmental growth signals comprising revenue and hiring growth, capital deployment, share repurchases, profitability, earnings sentiment and management performance. Each factor receives a quintile score of one (worst) to five (best), with the scores weighted based on a proprietary weighting methodology. Companies receiving an aggregate score below the median quintile in the investable universe are eliminated. The remaining companies are re-weighted by market capitalization, and the index composition is adjusted quarterly.

For the XOUT ETF, that results in a portfolio of 249 holdings. The two largest sector weights are technology and financials at 31.8% and 20.4%, respectively. The five largest positions are Microsoft Corp., Apple Inc., Inc., Alphabet Inc. (class-A shares) and Facebook Inc.

The fund’s expense ratio is 0.60%.

This XOUT ETF is a change of pace for GraniteShares, whose existing ETF lineup consists of four commodity products and one fixed-income fund. Its big hit has been the GraniteShares Gold Trust (BAR), which shares the title with another fund as the cheapest gold ETF with an expense ratio of 0.17%. That low price point has helped propel two-year-old BAR to an asset base of more than $617 million.