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Participant ○○○

S&P494 Fund?

I want to buy S&P494 fund which equals S&P500 minus FAANGM. How can I?

FAANGM = facebook, apple, amazon, netflix, alphabet, and microsoft. These 6 stocks make up 22%+ of S&P500 market cap. I think they are way overpriced.

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15 Replies
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Participant ○○○

Re: S&P494 Fund?

Are you talking about something like SPXT?

No, sorry it contains them.

This was a good read and confirms what you say.

https://www.yardeni.com/pub/yardenifangoverview.pdf

An SP500 ex. FAANG ETF is a billion dollar idea.

Fishingrod

 

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Participant ○○○

Re: S&P494 Fund?

Yep S&P500 sans FAANGM is what I am looking for. It might not exist.

I am lamenting that the 6 big boys (gals) are masking the rot happening within the stock market with their unusual gains.

I would rather own the 494 companies.

Perhaps eq wt SP500 like RSP would limit the 6 companies to 1.2% of the underlying index but unfortunately it equal weights the good and the bad in the rest of the 494.

I want cap-weighted but without the big 6

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Contributor ○○○

Re: S&P494 Fund?


@SteadyEddy wrote:

I want to buy S&P494 fund which equals S&P500 minus FAANGM. How can I?

FAANGM = facebook, apple, amazon, netflix, alphabet, and microsoft. These 6 stocks make up 22%+ of S&P500 market cap. I think they are way overpriced.


@SteadyEddy,

Direct indexing would allow you to do this.

Link

 

Schwab may be offering direct indexing solutions in the near future after acquiring Motif's technology and intellectual property.

“We continue to see an increasing number of clients interested in customizing their investing experience to suit their values, objectives and personal circumstances. We intend to leverage Motif’s platform to build on Schwab’s existing capabilities and help accelerate our development of thematic and direct indexing solutions for Schwab’s retail investors and RIA clients – all with the sophisticated digital experience our clients expect from Schwab.”

Link

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Participant ○○

Re: S&P494 Fund?

S&P Large value index has 396 stocks. How about 1/4 SP500 growth index and 3/4 SP value index to dilute the impact of FAANGM?

 

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Participant ○○

Re: S&P494 Fund?

Since those six are 20% of the SP500 market cap you could buy $100K of the index and sell short 10K of those six stocks to effectively halve your exposure.  To be clear, I think that is a risky strategy and I don't recommend it, but if you want to back up your thesis with real money that is one way.

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Participant ○○○

Re: S&P494 Fund?


@rila3400 wrote:

@SteadyEddy wrote:

I want to buy S&P494 fund which equals S&P500 minus FAANGM. How can I?

FAANGM = facebook, apple, amazon, netflix, alphabet, and microsoft. These 6 stocks make up 22%+ of S&P500 market cap. I think they are way overpriced.


@SteadyEddy,

Direct indexing would allow you to do this.

Link

 

Schwab may be offering direct indexing solutions in the near future after acquiring Motif's technology and intellectual property.

“We continue to see an increasing number of clients interested in customizing their investing experience to suit their values, objectives and personal circumstances. We intend to leverage Motif’s platform to build on Schwab’s existing capabilities and help accelerate our development of thematic and direct indexing solutions for Schwab’s retail investors and RIA clients – all with the sophisticated digital experience our clients expect from Schwab.”

Link


Interesting idea but direct indexing 494 stocks is cumbersome and will be a tax filing nightmare. Right?

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Participant ○○○

Re: S&P494 Fund?


@waffle wrote:

S&P Large value index has 396 stocks. How about 1/4 SP500 growth index and 3/4 SP value index to dilute the impact of FAANGM?

 


Sounds like a very good idea. I will explore further. Thank you.

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Participant ○○○

Re: S&P494 Fund?


@SJ60 wrote:

Since those six are 20% of the SP500 market cap you could buy $100K of the index and sell short 10K of those six stocks to effectively halve your exposure.  To be clear, I think that is a risky strategy and I don't recommend it, but if you want to back up your thesis with real money that is one way.


Another interesting idea. I also like the idea waffle floated above.

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Frequent Contributor

Re: S&P494 Fund?

             Someone should explain this “thinking” method of investing. It sounds like you don’t want to make to much money by investing. So you might switch to a value model from a blend or growth posture to make less? Instead of when an investment goes up you cash some in when you “think” you need to? Correct? Or is there a tax tail combo investment method at play also? Confusing post for me.

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Participant ○○

Re: S&P494 Fund?


@SteadyEddy wrote:

I want to buy S&P494 fund which equals S&P500 minus FAANGM. How can I?FAANGM = facebook, apple, amazon, netflix, alphabet, and microsoft. These 6 stocks make up 22%+ of S&P500 market cap. I think they are way overpriced.


You could just invest in RSP where FAANGM is less than 2% of the S&P 500 equal weight index.

helmut

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Frequent Contributor

Re: S&P494 Fund?


@SteadyEddy wrote:

I want to buy S&P494 fund which equals S&P500 minus FAANGM. How can I?

FAANGM = facebook, apple, amazon, netflix, alphabet, and microsoft. These 6 stocks make up 22%+ of S&P500 market cap. I think they are way overpriced.


Sure and I want to be able to fly :-)

I heard they are going to create a fund called SteadyEddy stock fund with ER=0.01% and you would be able to select the stocks you want + what % in each + make changes once a month.  This way you don't need to replace it with another fund and stay invested forever in only one fund.

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Participant ○○○

Re: S&P494 Fund?


@FD1001 wrote:

@SteadyEddy wrote:

I want to buy S&P494 fund which equals S&P500 minus FAANGM. How can I?

FAANGM = facebook, apple, amazon, netflix, alphabet, and microsoft. These 6 stocks make up 22%+ of S&P500 market cap. I think they are way overpriced.


Sure and I want to be able to fly :-)

I heard they are going to create a fund called SteadyEddy stock fund with ER=0.01% and you would be able to select the stocks you want + what % in each + make changes once a month.  This way you don't need to replace it with another fund and stay invested forever in only one fund.


Yes.. and I heard you are the manager for that fund, my dear FD!! Have a safe holiday!!

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Frequent Contributor

Re: S&P494 Fund?

DIA correlates well with SPY. But DIA has only AAPL + MSFT at 14% from FAAMNG group.

So, just buy DIA, or buy DIA and short AAPL & MSFT.

YBB
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Explorer ○

Re: S&P494 Fund?

Why not just buy AKREX? This is a LG top performing fund with 0% FAANG stocks in it and only around 5% technology. It is a very focused fund with 20-25 positions vs. 494, so it may not provide the diversity you're looking for.

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Participant ○○○

Re: S&P494 Fund?

While not a complete solution, FSTVX (total market) holds the big 6 at around 14%. 

USMV has only 1 of them in the top 10 holdings, again, not exactly what you are asking for, but maybe close enough? I believe it holds 211 stocks.

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