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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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Designed to provide broad exposure to the Style Box - Large Cap Blend category of the market, the Goldman Sachs Equal Weight U.S. Large Cap Equity ETF (GSEW - Free Report) is a smart beta exchange traded fund launched on 09/12/2017.
What Are Smart Beta ETFs?
For a long time now, the ETF industry has been flooded with products based on market capitalization weighted indexes, which are designed to represent the broader market or a particular market segment.
Market cap weighted indexes work great for investors who believe in market efficiency. They provide a low-cost, convenient and transparent way of replicating market returns.
If you're the kind of investor who would rather try and beat the market through good stock selection, then smart beta funds are your best choice; this fund class is known for tracking non-cap weighted strategies.
Non-cap weighted indexes try to choose stocks that have a better chance of risk-return performance, which is based on specific fundamental characteristics, or a mix of other such characteristics.
This area offers many different investment choices, such as simplest equal-weighting, fundamental weighting and volatility/momentum based weighting methodologies; however, not all of these strategies can deliver superior results.
Fund Sponsor & Index
The fund is managed by Goldman Sachs Funds, and has been able to amass over $703.44 million, which makes it one of the average sized ETFs in the Style Box - Large Cap Blend. This particular fund, before fees and expenses, 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
Investors should also pay attention to an ETF's expense ratio. Lower cost products will produce better results than those with a higher cost, assuming all other metrics remain the same.
Annual operating expenses for GSEW are 0.09%, which makes it one of the least expensive products in the space.
The fund has a 12-month trailing dividend yield of 1.56%.
Sector Exposure and Top Holdings
Most ETFs are very transparent products, and disclose their holdings on a daily basis. ETFs also offer diversified exposure, which minimizes single stock risk, though it's still important for investors to research a fund's holdings.
GSEW's heaviest allocation is in the Information Technology sector, which is about 17.70% of the portfolio. Its Industrials and Financials round out the top three.
Looking at individual holdings, 3m Co (MMM - Free Report) accounts for about 0.23% of total assets, followed by Freeport-Mcmoran Inc (FCX - Free Report) and Estee Lauder Cos Inc (EL - Free Report) .
GSEW's top 10 holdings account for about 2.22% of its total assets under management.
Performance and Risk
The ETF has added about 8.42% and is up roughly 24.08% so far this year and in the past one year (as of 05/21/2024), respectively. GSEW has traded between $56.58 and $72.81 during this last 52-week period.
The fund has a beta of 1.05 and standard deviation of 17.85% 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 $463.20 billion in assets, SPDR S&P 500 ETF has $528.49 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?
Designed to provide broad exposure to the Style Box - Large Cap Blend category of the market, the Goldman Sachs Equal Weight U.S. Large Cap Equity ETF (GSEW - Free Report) is a smart beta exchange traded fund launched on 09/12/2017.
What Are Smart Beta ETFs?
For a long time now, the ETF industry has been flooded with products based on market capitalization weighted indexes, which are designed to represent the broader market or a particular market segment.
Market cap weighted indexes work great for investors who believe in market efficiency. They provide a low-cost, convenient and transparent way of replicating market returns.
If you're the kind of investor who would rather try and beat the market through good stock selection, then smart beta funds are your best choice; this fund class is known for tracking non-cap weighted strategies.
Non-cap weighted indexes try to choose stocks that have a better chance of risk-return performance, which is based on specific fundamental characteristics, or a mix of other such characteristics.
This area offers many different investment choices, such as simplest equal-weighting, fundamental weighting and volatility/momentum based weighting methodologies; however, not all of these strategies can deliver superior results.
Fund Sponsor & Index
The fund is managed by Goldman Sachs Funds, and has been able to amass over $703.44 million, which makes it one of the average sized ETFs in the Style Box - Large Cap Blend. This particular fund, before fees and expenses, 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
Investors should also pay attention to an ETF's expense ratio. Lower cost products will produce better results than those with a higher cost, assuming all other metrics remain the same.
Annual operating expenses for GSEW are 0.09%, which makes it one of the least expensive products in the space.
The fund has a 12-month trailing dividend yield of 1.56%.
Sector Exposure and Top Holdings
Most ETFs are very transparent products, and disclose their holdings on a daily basis. ETFs also offer diversified exposure, which minimizes single stock risk, though it's still important for investors to research a fund's holdings.
GSEW's heaviest allocation is in the Information Technology sector, which is about 17.70% of the portfolio. Its Industrials and Financials round out the top three.
Looking at individual holdings, 3m Co (MMM - Free Report) accounts for about 0.23% of total assets, followed by Freeport-Mcmoran Inc (FCX - Free Report) and Estee Lauder Cos Inc (EL - Free Report) .
GSEW's top 10 holdings account for about 2.22% of its total assets under management.
Performance and Risk
The ETF has added about 8.42% and is up roughly 24.08% so far this year and in the past one year (as of 05/21/2024), respectively. GSEW has traded between $56.58 and $72.81 during this last 52-week period.
The fund has a beta of 1.05 and standard deviation of 17.85% 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 $463.20 billion in assets, SPDR S&P 500 ETF has $528.49 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.