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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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The Goldman Sachs Equal Weight U.S. Large Cap Equity ETF (GSEW - Free Report) made its debut on 09/12/2017, and is a smart beta exchange traded fund that provides broad exposure to the Style Box - Large Cap Blend category of the market.
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.
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.
These indexes attempt to select stocks that have better chances of risk-return performance, based on certain fundamental characteristics or a combination of such characteristics.
Even though this space provides many choices to investors--think one of the simplest methodologies like equal-weighting and more complicated ones like fundamental and volatility/momentum based weighting--not all have been able to deliver first-rate results.
Fund Sponsor & Index
Because the fund has amassed over $730.43 million, this makes it one of the larger ETFs in the Style Box - Large Cap Blend. GSEW is managed by Goldman Sachs Funds. 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
Cost is an important factor in selecting the right ETF, and cheaper funds can significantly outperform their more expensive cousins if all other fundamentals are the same.
Operating expenses on an annual basis are 0.09% for this ETF, which makes it one of the least expensive products in the space.
It's 12-month trailing dividend yield comes in at 1.58%.
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 16.60% of the portfolio. Its Industrials and Financials round out the top three.
Looking at individual holdings, Exxon Mobil Corp (XOM - Free Report) accounts for about 0.40% of total assets, followed by First Solar Inc (FSLR - Free Report) and Microstrategy Inc (MSTR - Free Report) .
The top 10 holdings account for about 2.89% of total assets under management.
Performance and Risk
Year-to-date, the Goldman Sachs Equal Weight U.S. Large Cap Equity ETF has gained about 8.43% so far, and it's up approximately 13.82% over the last 12 months (as of 07/25/2024). GSEW has traded between $56.58 and $74.38 in this past 52-week period.
The fund has a beta of 1.05 and standard deviation of 17.81% for the trailing three-year period. With about 495 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 $492.15 billion in assets, SPDR S&P 500 ETF has $556.10 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?
The Goldman Sachs Equal Weight U.S. Large Cap Equity ETF (GSEW - Free Report) made its debut on 09/12/2017, and is a smart beta exchange traded fund that provides broad exposure to the Style Box - Large Cap Blend category of the market.
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.
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.
These indexes attempt to select stocks that have better chances of risk-return performance, based on certain fundamental characteristics or a combination of such characteristics.
Even though this space provides many choices to investors--think one of the simplest methodologies like equal-weighting and more complicated ones like fundamental and volatility/momentum based weighting--not all have been able to deliver first-rate results.
Fund Sponsor & Index
Because the fund has amassed over $730.43 million, this makes it one of the larger ETFs in the Style Box - Large Cap Blend. GSEW is managed by Goldman Sachs Funds. 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
Cost is an important factor in selecting the right ETF, and cheaper funds can significantly outperform their more expensive cousins if all other fundamentals are the same.
Operating expenses on an annual basis are 0.09% for this ETF, which makes it one of the least expensive products in the space.
It's 12-month trailing dividend yield comes in at 1.58%.
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 16.60% of the portfolio. Its Industrials and Financials round out the top three.
Looking at individual holdings, Exxon Mobil Corp (XOM - Free Report) accounts for about 0.40% of total assets, followed by First Solar Inc (FSLR - Free Report) and Microstrategy Inc (MSTR - Free Report) .
The top 10 holdings account for about 2.89% of total assets under management.
Performance and Risk
Year-to-date, the Goldman Sachs Equal Weight U.S. Large Cap Equity ETF has gained about 8.43% so far, and it's up approximately 13.82% over the last 12 months (as of 07/25/2024). GSEW has traded between $56.58 and $74.38 in this past 52-week period.
The fund has a beta of 1.05 and standard deviation of 17.81% for the trailing three-year period. With about 495 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 $492.15 billion in assets, SPDR S&P 500 ETF has $556.10 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.