Global X introduces two new U.S. equity ETFs today on the NYSE – the Global X S&P 500 U.S. Revenue Leaders ETF (EGLE), and the Global X S&P 500 U.S Market Leaders Top 50 ETF (FLAG).
“In the current market environment, investors are rethinking their portfolios and looking more closely at the idea of a more independent U.S. economy,” said Roxanna Islam, head of sector & industry research at VettaFi. “EGLE and FLAG allow investors to take advantage of familiar companies with significant strength based within the U.S. and less exposure abroad.”
U.S. Revenue Leaders
First, let’s look at EGLE, which tracks the S&P 500 U.S. Revenue Leaders Index. This index targets S&P 500 companies that draw at least half their revenue from domestic sources. According to the prospectus, the fund uses a weighted methodology to balance exposure, aiming to reduce concentration in the largest stocks.
EGLE carries an expense ratio of 0.19%.
Similar to EGLE, FLAG is built to focus on companies that generate at least half of their revenue in the U.S. However, FLAG tracks the S&P 500 U.S. Revenue Market Leaders 50 Index, which selects the top 50 U.S.-listed companies, excluding those in the real estate sector. In addition to free cash flow margin and return on invested capital, the index selects its components using a Market Leader Score, which evaluates each company’s quality and business strength.
FLAG expense ratio is 0.29%.
The Case for Exposure to Domestic Funds
Globalization has contributed to an increase in U.S. companies earning a larger portion of their revenue abroad. The funds offer a different angle on what constitutes exposure to the U.S. economy. The U.S. has remained the fastest-growing major advanced economy since the COVID pandemic, amplifying the case for domestic exposure.
“The S&P 500 U.S. Revenue Leaders Index emphasizes domestic exposure in a sector-controlled manner, differentiating it from global-leaning benchmarks,” said S&P Dow Jones Indices Chief Product Officer Cameron Drinkwater. “The S&P 500 U.S. Revenue Market Leaders 50 Index focuses on companies recognized as domestic market leaders, selected for their high free cash flow margin, high return on invested capital, and high market share.”
Both funds are managed by Global X portfolio managers Nam To, Wayne Xie, Vanessa Yang, and Sandy Lu.
Global X manages $55 billion in assets across more than 90 ETFs in the U.S.
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