Does a direct link like xyz.com gets tracked in the email?
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there two ways to track emails. In both cases it is possible to track links pointing at the homepage (what you refer to as “direct links”, correct?). They don’t work any different from other links.
When sending out emails with CIO you will see that the links in your live email in the inbox (hover over them and check the bottom corners) will not be the ones you entered in the editor. They will start with something like https://e-eu.customeriomail.com/e/c/... (this varies depending on which region you have chosen in if you have set up your own tracking links). These links are redirect links so CIO knows when and who clicked the link. The information is stored in CIO.
Website Tracking (e.g. Google Anayltics)
You can also use UTM parameters to see where your website visitor came from. This includes also CIO and your campaigns. Check out this article for more information.
Hope that helps,