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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?
Products that are based on market cap weighted indexes, which are strategies designed to reflect a specific market segment or the market as a whole, have traditionally dominated the ETF industry.
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.
Based on specific fundamental characteristics, or a combination of such, these indexes attempt to pick stocks that have a better chance of risk-return performance.
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 $854.13 million, which makes it one of the larger 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
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.
GSEW's 12-month trailing dividend yield is 1.17%.
Sector Exposure and Top Holdings
Even though ETFs offer diversified exposure which minimizes single stock risk, it is still important to look into a fund's holdings before investing. Luckily, 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 21% of the portfolio --while Healthcare and Industrials round out the top three.
Looking at individual holdings, Usd U.s. Dollar (USD - Free Report) accounts for about 0.41% of total assets, followed by Docusign Inc (DOCU - Free Report) and Roku Inc (ROKU - Free Report) .
The top 10 holdings account for about 2.71% of total assets under management.
Performance and Risk
The ETF has added roughly 21.11% and it's up approximately 34.78% so far this year and in the past one year (as of 10/08/2021), respectively. GSEW has traded between $49.16 and $70.48 during this last 52-week period.
The fund has a beta of 1.07 and standard deviation of 23.72% for the trailing three-year period. With about 501 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 $293.16 billion in assets, SPDR S&P 500 ETF has $391.66 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?
Products that are based on market cap weighted indexes, which are strategies designed to reflect a specific market segment or the market as a whole, have traditionally dominated the ETF industry.
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.
Based on specific fundamental characteristics, or a combination of such, these indexes attempt to pick stocks that have a better chance of risk-return performance.
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 $854.13 million, which makes it one of the larger 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
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.
GSEW's 12-month trailing dividend yield is 1.17%.
Sector Exposure and Top Holdings
Even though ETFs offer diversified exposure which minimizes single stock risk, it is still important to look into a fund's holdings before investing. Luckily, 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 21% of the portfolio --while Healthcare and Industrials round out the top three.
Looking at individual holdings, Usd U.s. Dollar (USD - Free Report) accounts for about 0.41% of total assets, followed by Docusign Inc (DOCU - Free Report) and Roku Inc (ROKU - Free Report) .
The top 10 holdings account for about 2.71% of total assets under management.
Performance and Risk
The ETF has added roughly 21.11% and it's up approximately 34.78% so far this year and in the past one year (as of 10/08/2021), respectively. GSEW has traded between $49.16 and $70.48 during this last 52-week period.
The fund has a beta of 1.07 and standard deviation of 23.72% for the trailing three-year period. With about 501 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 $293.16 billion in assets, SPDR S&P 500 ETF has $391.66 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.