The Goldman Sachs Equal Weight U.S. Large Cap Equity ETF (GSEW) was launched on 09/12/2017, and is a smart beta exchange traded fund designed to offer 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.
A good option for investors who believe in market efficiency, market cap weighted indexes offer a low-cost, convenient, and transparent way of replicating market returns.
However, some investors believe in the possibility of beating the market through exceptional stock selection, and choose a different type of fund that tracks non-cap weighted strategies: smart beta.
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.
The smart beta space gives investors many different choices, from equal-weighting, one of the simplest strategies, to more complicated ones like fundamental and volatility/momentum based weighting. However, not all of these methodologies have been able to deliver remarkable returns.
Fund Sponsor & Index
Because the fund has amassed over $1.20 billion, this makes it one of the larger ETFs in the Style Box - Large Cap Blend. GSEW is managed by Goldman Sachs Funds. 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.
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.
With one of the least expensive products in the space, this ETF has annual operating expenses of 0.09%.
It's 12-month trailing dividend yield comes in at 1.53%.
Sector Exposure and Top Holdings
Even though ETFs offer diversified exposure that minimizes single stock risk, investors should also look at the actual holdings inside the fund. Luckily, most ETFs are very transparent products that disclose their holdings on a daily basis.
GSEW's heaviest allocation is in the Industrials sector, which is about 16.40% of the portfolio. Its Financials and Information Technology round out the top three.
Looking at individual holdings, Moderna Inc (MRNA) accounts for about 0.22% of total assets, followed by Entegris Inc (ENTG) and Dollar Tree Inc (DLTR).
GSEW's top 10 holdings account for about 2.11% of its total assets under management.
Performance and Risk
Year-to-date, the Goldman Sachs Equal Weight U.S. Large Cap Equity ETF return is roughly 0.04% so far, and it's up approximately 8.90% over the last 12 months (as of 04/03/2025). GSEW has traded between $68.68 and $82.83 in this past 52-week period.
GSEW has a beta of 1.02 and standard deviation of 17.08% 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) tracks S&P 500 Index and the Vanguard S&P 500 ETF (VOO) tracks S&P 500 Index. IShares Core S&P 500 ETF has $585.81 billion in assets, Vanguard S&P 500 ETF has $590.99 billion. IVV has an expense ratio of 0.03% and VOO charges 0.03%.
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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Goldman Sachs Equal Weight U.S. Large Cap Equity ETF (GSEW): ETF Research Reports Dollar Tree, Inc. (DLTR): Free Stock Analysis Report Moderna, Inc. (MRNA): Free Stock Analysis Report Entegris, Inc. (ENTG): Free Stock Analysis Report Vanguard S&P 500 ETF (VOO): ETF Research Reports iShares Core S&P 500 ETF (IVV): ETF Research ReportsThis article originally published on Zacks Investment Research (zacks.com).
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