In general, passive mutual funds (as well as ETFs) provide a good way to diversify without keeping track of and/or a large number of separate securities or paying high additional expenses.
However, many of the best-known indexes tend to be weighted on market capitalization, which increases exposure to movements in the biggest holdings, somewhat undoing diversification.
For example, QQQ (tracks Nasdaq) has 44% of its value invested in only 5 companies.
If I want a bigger share allocated to Texas Instruments than the 1.34% that QQQ puts in there, the solution is straightforward: buy some shares of TXN.
But if I think 11% in Apple or 5% in Facebook is too much, what can I do?
One option is to find a fund with a different weighting. Those, even the ones with a passive indexing rule, tend to have higher expense ratios (compare QQQE at 0.35% to QQQ's 0.15 or VADDX at 0.28% to SWPPX at 0.03%). Admittedly, a 0.25% difference is not that much in absolute terms, but in relative terms it's a factor of 9X. Also, the differently-weighted funds may not be offered commission-free by my broker.
Ideally it would be possibly to simply own negative shares in these companies over the same time period as the index fund. There's no risk, because any losses on the "negative shares" are made up for by the profits made by long positions within the index fund (although they can't be separated from the fund, which has potential drawbacks of its own).
Here it is suggested that the solution would be "put" options. But those expire and must be repurchased, so it seems like a very time-intensive approach.
Is there a way to offset against positions held in an index fund in a long-term manner? Or is my only hope continuing to screen funds to find one that very closely matches the allocations I want?