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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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Making its debut on 09/12/2017, smart beta exchange traded fund Goldman Sachs Equal Weight U.S. Large Cap Equity ETF (GSEW - Free Report) provides investors broad exposure to the Style Box - Large Cap Blend category of the market.
What Are Smart Beta ETFs?
The ETF industry has traditionally been dominated by products based on market capitalization weighted indexes that are designed to represent the market or a particular segment of the market.
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.
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.
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.
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
The fund is managed by Goldman Sachs Funds, and has been able to amass over $540.30 million, which makes it one of the average sized ETFs in the Style Box - Large Cap Blend. This particular fund seeks to match the performance of the Solactive US Large Cap Equal Weight Index before fees and expenses.
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.
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 1.67%.
Sector Exposure and Top Holdings
ETFs offer diversified exposure and thus minimize single stock risk, but it is still important to delve into a fund's holdings before investing. Most ETFs are very transparent products and many disclose their holdings on a daily basis.
GSEW's heaviest allocation is in the Information Technology sector, which is about 17.30% of the portfolio. Its Industrials and Financials round out the top three.
When you look at individual holdings, Usd U.s. Dollar (USD - Free Report) accounts for about 0.46% of the fund's total assets, followed by Block Inc (SQ - Free Report) and Datadog Inc (DDOG - Free Report) .
Its top 10 holdings account for approximately 2.81% of GSEW's total assets under management.
Performance and Risk
Year-to-date, the Goldman Sachs Equal Weight U.S. Large Cap Equity ETF has lost about -1.74% so far, and was up about 11.84% over the last 12 months (as of 01/19/2024). GSEW has traded between $56.58 and $67.28 in this past 52-week period.
The ETF has a beta of 1.06 and standard deviation of 18.21% 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 $405.62 billion in assets, SPDR S&P 500 ETF has $480.75 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?
Making its debut on 09/12/2017, smart beta exchange traded fund Goldman Sachs Equal Weight U.S. Large Cap Equity ETF (GSEW - Free Report) provides investors broad exposure to the Style Box - Large Cap Blend category of the market.
What Are Smart Beta ETFs?
The ETF industry has traditionally been dominated by products based on market capitalization weighted indexes that are designed to represent the market or a particular segment of the market.
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.
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.
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.
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
The fund is managed by Goldman Sachs Funds, and has been able to amass over $540.30 million, which makes it one of the average sized ETFs in the Style Box - Large Cap Blend. This particular fund seeks to match the performance of the Solactive US Large Cap Equal Weight Index before fees and expenses.
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.
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 1.67%.
Sector Exposure and Top Holdings
ETFs offer diversified exposure and thus minimize single stock risk, but it is still important to delve into a fund's holdings before investing. Most ETFs are very transparent products and many disclose their holdings on a daily basis.
GSEW's heaviest allocation is in the Information Technology sector, which is about 17.30% of the portfolio. Its Industrials and Financials round out the top three.
When you look at individual holdings, Usd U.s. Dollar (USD - Free Report) accounts for about 0.46% of the fund's total assets, followed by Block Inc (SQ - Free Report) and Datadog Inc (DDOG - Free Report) .
Its top 10 holdings account for approximately 2.81% of GSEW's total assets under management.
Performance and Risk
Year-to-date, the Goldman Sachs Equal Weight U.S. Large Cap Equity ETF has lost about -1.74% so far, and was up about 11.84% over the last 12 months (as of 01/19/2024). GSEW has traded between $56.58 and $67.28 in this past 52-week period.
The ETF has a beta of 1.06 and standard deviation of 18.21% 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 $405.62 billion in assets, SPDR S&P 500 ETF has $480.75 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.