Should Goldman Sachs Equal Weight U.S. Large Cap Equity ETF (GSEW) Be on Your Investing Radar?
The Goldman Sachs Equal Weight U.S. Large Cap Equity ETF (GSEW) was launched on 09/12/2017, and is a passively managed exchange traded fund designed to offer broad exposure to the Large Cap Blend segment of the US equity market.
The fund is sponsored by Goldman Sachs Funds. It has amassed assets over $605.78 million, making it one of the larger ETFs attempting to match the Large Cap Blend segment of the US equity market.
Why Large Cap Blend
Companies that fall in the large cap category tend to have a market capitalization above $10 billion. Considered a more stable option, large cap companies boast more predictable cash flows and are less volatile than their mid and small cap counterparts.
Blend ETFs are aptly named, since they tend to hold a mix of growth and value stocks, as well as show characteristics of both kinds of equities.
Costs
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 counterparts, other things remaining the same.
Annual operating expenses for this ETF are 0.09%, making it one of the least expensive products in the space.
It has a 12-month trailing dividend yield of 1.58%.
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.
This ETF has heaviest allocation to the Information Technology sector--about 18% of the portfolio. Industrials and Financials round out the top three.
Looking at individual holdings, Usd U.s. Dollar (USD) accounts for about 0.46% of total assets, followed by Block Inc (SQ) and Datadog Inc (DDOG).
The top 10 holdings account for about 2.81% of total assets under management.
Performance and Risk
GSEW 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.
The ETF has gained about 3.83% so far this year and was up about 16.97% in the last one year (as of 02/29/2024). In the past 52-week period, it has traded between $56.58 and $69.63.
The ETF has a beta of 1.05 and standard deviation of 18.06% 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 carries a Zacks ETF Rank of 3 (Hold), which is based on expected asset class return, expense ratio, and momentum, among other factors. Thus, GSEW is a sufficient option for those seeking exposure to the Style Box - Large Cap Blend area of the market. Investors might also want to consider some other ETF options in the space.
The iShares Core S&P 500 ETF (IVV) and the SPDR S&P 500 ETF (SPY) track a similar index. While iShares Core S&P 500 ETF has $441.21 billion in assets, SPDR S&P 500 ETF has $494.18 billion. IVV has an expense ratio of 0.03% and SPY charges 0.09%.
Bottom-Line
Passively managed ETFs are becoming increasingly popular with institutional as well as retail investors due to their low cost, transparency, flexibility and tax efficiency. They are excellent vehicles for long term investors.
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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Goldman Sachs Equal Weight U.S. Large Cap Equity ETF (GSEW): ETF Research Reports
SPDR S&P 500 ETF (SPY): ETF Research Reports
Block, Inc. (SQ) : Free Stock Analysis Report
iShares Core S&P 500 ETF (IVV): ETF Research Reports
ProShares Ultra Semiconductors (USD): ETF Research Reports
Datadog, Inc. (DDOG) : Free Stock Analysis Report
