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Is Goldman Sachs Equal Weight U.S. Large Cap Equity ETF (GSEW) a Strong ETF Right Now?
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Launched on 09/12/2017, the Goldman Sachs Equal Weight U.S. Large Cap Equity ETF (GSEW - Free Report) is a smart beta exchange traded fund offering broad exposure to the Style Box - Large Cap Blend category of the market.
What Are Smart Beta ETFs?
The ETF industry has long been dominated by products based on market cap weighted indexes, a strategy created to reflect the market or a particular market segment.
Because market cap weighted indexes provide a low-cost, convenient, and transparent way of replicating market returns, they work well for investors who believe in market efficiency.
But, there are some investors who would rather invest in smart beta funds; these funds track non-cap weighted strategies, and are a strong option for those who prefer choosing great stocks in order to beat the market.
By attempting to pick stocks that have a better chance of risk-return performance, non-cap weighted indexes are based on certain fundamental characteristics, or a combination of such.
While this space offers a number of choices to investors, including simplest equal-weighting, fundamental weighting and volatility/momentum based weighting methodologies, not all these strategies have been able to deliver superior results.
Fund Sponsor & Index
The fund is managed by Goldman Sachs Funds, and has been able to amass over $468.05 million, which makes it one of the larger ETFs in the Style Box - Large Cap Blend. Before fees and expenses, GSEW seeks to match the performance of the Solactive US Large Cap Equal Weight Index.
The Solactive US Large Cap Equal Weight Index is an equal-weight version of the Solactive US Large Cap Index including equity securities of approximately 500 of the largest U.S. companies.
Cost & Other Expenses
When considering an ETF's total return, expense ratios are an important factor. And, cheaper funds can significantly outperform their more expensive cousins in the long term if all other factors remain equal.
Annual operating expenses for this ETF are 0.09%, making it one of the least expensive products in the space.
The fund has a 12-month trailing dividend yield of 1.84%.
Sector Exposure and Top Holdings
While ETFs offer diversified exposure, which minimizes single stock risk, a deep look into a fund's holdings is a valuable exercise. And, most ETFs are very transparent products that disclose their holdings on a daily basis.
This ETF has heaviest allocation in the Information Technology sector - about 16.50% of the portfolio. Financials and Industrials round out the top three.
Taking into account individual holdings, Usd U.s. Dollar (USD - Free Report) accounts for about 0.29% of the fund's total assets, followed by Texas Pacific Land Corp (TPL - Free Report) and Eli Lilly & Co (LLY - Free Report) .
Its top 10 holdings account for approximately 2.5% of GSEW's total assets under management.
Performance and Risk
So far this year, GSEW has gained about 7.45%, and is up roughly 4.82% in the last one year (as of 11/17/2023). During this past 52-week period, the fund has traded between $56.58 and $64.76.
The fund has a beta of 1.06 and standard deviation of 18.23% for the trailing three-year period. With about 496 holdings, it effectively diversifies company-specific risk.
Alternatives
Goldman Sachs Equal Weight U.S. Large Cap Equity ETF is a reasonable option for investors seeking to outperform the Style Box - Large Cap Blend segment of the market. However, there are other ETFs in the space which investors could consider.
IShares Core S&P 500 ETF (IVV - Free Report) tracks S&P 500 Index and the SPDR S&P 500 ETF (SPY - Free Report) tracks S&P 500 Index. IShares Core S&P 500 ETF has $369.69 billion in assets, SPDR S&P 500 ETF has $423.58 billion. IVV has an expense ratio of 0.03% and SPY charges 0.09%.
Investors looking for cheaper and lower-risk options should consider traditional market cap weighted ETFs that aim to match the returns of the Style Box - Large Cap Blend.
Bottom Line
To learn more about this product and other ETFs, screen for products that match your investment objectives and read articles on latest developments in the ETF investing universe, please visit Zacks ETF Center.
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Is Goldman Sachs Equal Weight U.S. Large Cap Equity ETF (GSEW) a Strong ETF Right Now?
Launched on 09/12/2017, the Goldman Sachs Equal Weight U.S. Large Cap Equity ETF (GSEW - Free Report) is a smart beta exchange traded fund offering broad exposure to the Style Box - Large Cap Blend category of the market.
What Are Smart Beta ETFs?
The ETF industry has long been dominated by products based on market cap weighted indexes, a strategy created to reflect the market or a particular market segment.
Because market cap weighted indexes provide a low-cost, convenient, and transparent way of replicating market returns, they work well for investors who believe in market efficiency.
But, there are some investors who would rather invest in smart beta funds; these funds track non-cap weighted strategies, and are a strong option for those who prefer choosing great stocks in order to beat the market.
By attempting to pick stocks that have a better chance of risk-return performance, non-cap weighted indexes are based on certain fundamental characteristics, or a combination of such.
While this space offers a number of choices to investors, including simplest equal-weighting, fundamental weighting and volatility/momentum based weighting methodologies, not all these strategies have been able to deliver superior results.
Fund Sponsor & Index
The fund is managed by Goldman Sachs Funds, and has been able to amass over $468.05 million, which makes it one of the larger ETFs in the Style Box - Large Cap Blend. Before fees and expenses, GSEW seeks to match the performance of the Solactive US Large Cap Equal Weight Index.
The Solactive US Large Cap Equal Weight Index is an equal-weight version of the Solactive US Large Cap Index including equity securities of approximately 500 of the largest U.S. companies.
Cost & Other Expenses
When considering an ETF's total return, expense ratios are an important factor. And, cheaper funds can significantly outperform their more expensive cousins in the long term if all other factors remain equal.
Annual operating expenses for this ETF are 0.09%, making it one of the least expensive products in the space.
The fund has a 12-month trailing dividend yield of 1.84%.
Sector Exposure and Top Holdings
While ETFs offer diversified exposure, which minimizes single stock risk, a deep look into a fund's holdings is a valuable exercise. And, most ETFs are very transparent products that disclose their holdings on a daily basis.
This ETF has heaviest allocation in the Information Technology sector - about 16.50% of the portfolio. Financials and Industrials round out the top three.
Taking into account individual holdings, Usd U.s. Dollar (USD - Free Report) accounts for about 0.29% of the fund's total assets, followed by Texas Pacific Land Corp (TPL - Free Report) and Eli Lilly & Co (LLY - Free Report) .
Its top 10 holdings account for approximately 2.5% of GSEW's total assets under management.
Performance and Risk
So far this year, GSEW has gained about 7.45%, and is up roughly 4.82% in the last one year (as of 11/17/2023). During this past 52-week period, the fund has traded between $56.58 and $64.76.
The fund has a beta of 1.06 and standard deviation of 18.23% for the trailing three-year period. With about 496 holdings, it effectively diversifies company-specific risk.
Alternatives
Goldman Sachs Equal Weight U.S. Large Cap Equity ETF is a reasonable option for investors seeking to outperform the Style Box - Large Cap Blend segment of the market. However, there are other ETFs in the space which investors could consider.
IShares Core S&P 500 ETF (IVV - Free Report) tracks S&P 500 Index and the SPDR S&P 500 ETF (SPY - Free Report) tracks S&P 500 Index. IShares Core S&P 500 ETF has $369.69 billion in assets, SPDR S&P 500 ETF has $423.58 billion. IVV has an expense ratio of 0.03% and SPY charges 0.09%.
Investors looking for cheaper and lower-risk options should consider traditional market cap weighted ETFs that aim to match the returns of the Style Box - Large Cap Blend.
Bottom Line
To learn more about this product and other ETFs, screen for products that match your investment objectives and read articles on latest developments in the ETF investing universe, please visit Zacks ETF Center.