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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.
Investors who believe in market efficiency should consider market cap indexes, as they replicate market returns in a low-cost, convenient, and transparent way.
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.
This kind of index follows this same mindset, as it attempts to pick stocks that have better chances of risk-return performance; non-cap weighted strategies base selection on certain fundamental characteristics, or a mix of such characteristics.
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. GSEW has been able to amass assets over $610.61 million, making it one of the larger ETFs in the Style Box - Large Cap Blend. GSEW, 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
Expense ratios are an important factor in the return of an ETF and in the long-term, cheaper funds can significantly outperform their more expensive cousins, other things remaining 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 1.68%.
Sector Exposure and Top Holdings
It is important to delve into an ETF's holdings before investing despite the many upsides to these kinds of funds like diversified exposure, which minimizes single stock risk. And, most ETFs are very transparent products that disclose their holdings on a daily basis.
For GSEW, it has heaviest allocation in the Information Technology sector --about 17.10% of the portfolio --while Healthcare and Industrials round out the top three.
Taking into account individual holdings, Halliburton Co (HAL - Free Report) accounts for about 0.27% of the fund's total assets, followed by Activision Blizzard Inc and Las Vegas Sands Corp (LVS - Free Report) .
GSEW's top 10 holdings account for about 2.53% of its total assets under management.
Performance and Risk
So far this year, GSEW has lost about -22.01%, and is down about -15.76% in the last one year (as of 06/14/2022). During this past 52-week period, the fund has traded between $55.51 and $72.67.
The ETF has a beta of 1.05 and standard deviation of 24.97% for the trailing three-year period. With about 498 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 $278.91 billion in assets, SPDR S&P 500 ETF has $340.15 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.
Investors who believe in market efficiency should consider market cap indexes, as they replicate market returns in a low-cost, convenient, and transparent way.
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.
This kind of index follows this same mindset, as it attempts to pick stocks that have better chances of risk-return performance; non-cap weighted strategies base selection on certain fundamental characteristics, or a mix of such characteristics.
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. GSEW has been able to amass assets over $610.61 million, making it one of the larger ETFs in the Style Box - Large Cap Blend. GSEW, 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
Expense ratios are an important factor in the return of an ETF and in the long-term, cheaper funds can significantly outperform their more expensive cousins, other things remaining 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 1.68%.
Sector Exposure and Top Holdings
It is important to delve into an ETF's holdings before investing despite the many upsides to these kinds of funds like diversified exposure, which minimizes single stock risk. And, most ETFs are very transparent products that disclose their holdings on a daily basis.
For GSEW, it has heaviest allocation in the Information Technology sector --about 17.10% of the portfolio --while Healthcare and Industrials round out the top three.
Taking into account individual holdings, Halliburton Co (HAL - Free Report) accounts for about 0.27% of the fund's total assets, followed by Activision Blizzard Inc and Las Vegas Sands Corp (LVS - Free Report) .
GSEW's top 10 holdings account for about 2.53% of its total assets under management.
Performance and Risk
So far this year, GSEW has lost about -22.01%, and is down about -15.76% in the last one year (as of 06/14/2022). During this past 52-week period, the fund has traded between $55.51 and $72.67.
The ETF has a beta of 1.05 and standard deviation of 24.97% for the trailing three-year period. With about 498 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 $278.91 billion in assets, SPDR S&P 500 ETF has $340.15 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.