OEF vs USMC

OEFBiShares S&P 100 ETF

USMCBPrincipal U.S. Mega-Cap ETF

In short

OEF The S&P 500's inner circle. OEF has held about 100 U.S. mega-caps since 2000, a plain index fund that owns the giants and skips everything below them.

USMC Own the giants without letting the giants run the show. USMC follows a Nasdaq index that market-cap-weights only the very largest slice of US mega-caps, equal-weights the rest, and leans toward the calmer names, all for 0.12% a year.

Stated mandate

OEF The fund seeks to track an index composed of 100 U.S. mega-cap stocks.

USMC The Fund seeks investment results that closely correspond, before expenses, to the performance of the Nasdaq U.S. Mega Cap Select Leaders Index.

Why people hold it

• OEF Launched in 2000, one of the longest-running mega-cap index funds around, and now a multi-billion-dollar fund.
• Tracks the S&P 100 Index with very little slippage, which is the whole job of a fund like this.
• No leverage, no derivatives overlay: a standard 1940 Act stock fund holding about 100 U.S. mega-caps, paying out quarterly.

• USMC Costs 0.12% a year, a fraction of the typical fee among active US equity funds and level with the cheapest strong names in that group, like DFAU.
• The rules do the work: cap-weight the top 10% of aggregate market value, equal-weight the rest, nudge weight toward lower-volatility deciles, reset each April and October.nasdaq.com
• Trading since 2017 and now a multi-billion-dollar fund, it ranks among the strongest overall builds in its US equity peer group.
• Distributions arrive quarterly, and the fund sees steady enough trading volume for ordinary retail-sized orders.

Worth knowing

• OEF At 0.20% a year, it costs four times the 0.05% Vanguard charges on mega-cap rivals MGC and MGK.
• About 100 names, weighted by size, means the handful of largest U.S. companies set the tone. Concentration is the design, not a bug.
• Moderately traded rather than the busiest ticker in mega-cap land, so limit orders earn their keep in fast markets.

• USMC Concentrated by design: a few dozen mega-caps, so one company's stumble lands harder here than in a 500-stock index fund.
• By capping how much the biggest names dominate, it deliberately holds a different mix than a cap-weighted S&P fund, and its results diverge accordingly.nasdaq.com
• Weights reset only twice a year, in April and October, so drift between reviews comes with the strategy.nasdaq.com

Full OEF profile⁠

Full USMC profile⁠