A smart beta exchange traded fund, the Goldman Sachs Equal Weight U.S. Large Cap Equity ETF (GSEW) debuted on 09/12/2017, and offers broad exposure to the Style Box - Large Cap Blend category of the market.
What Are Smart Beta ETFs?
The ETF industry has long been dominated by products based on market cap weighted indexes, a strategy created to reflect the market or a particular market segment.
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.
On the other hand, some investors who believe that it is possible to beat the market by superior stock selection opt to invest in another class of funds that track non-cap weighted strategies--popularly known as smart beta.
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, and has been able to amass over $1.57 billion, which makes it one of the larger ETFs in the Style Box - Large Cap Blend. Before fees and expenses, GSEW 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
Since cheaper funds tend to produce better results than more expensive funds, assuming all other factors remain equal, it is important for investors to pay attention to an ETF's expense ratio.
Annual operating expenses for GSEW are 0.09%, which makes it one of the least expensive products in the space.
It has a 12-month trailing dividend yield of 1.48%.
Sector Exposure and Top Holdings
While ETFs offer diversified exposure, which minimizes single stock risk, a deep look into a fund's holdings is a valuable exercise. And, most ETFs are very transparent products that disclose their holdings on a daily basis.
GSEW's heaviest allocation is in the Information Technology sector, which is about 16.9% of the portfolio. Its Industrials and Financials round out the top three.
Looking at individual holdings, Rocket Lab Corp (RKLB) accounts for about 0.38% of total assets, followed by Sandisk Llc (SNDK) and Ast Spacemobile Inc (ASTS).
Its top 10 holdings account for approximately 2.93% 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 added roughly 2.9% so far, and is up roughly 11.27% over the last 12 months (as of 02/13/2026). GSEW has traded between $67.22 $89.12 in this past 52-week period.
The fund has a beta of 1.00 and standard deviation of 14.37% 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) 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 $752.28 billion in assets, Vanguard S&P 500 ETF has $851.55 billion. IVV has an expense ratio of 0.03% and VOO changes 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.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Goldman Sachs Equal Weight U.S. Large Cap Equity ETF (GSEW): ETF Research ReportsThis article originally published on Zacks Investment Research (zacks.com).
Zacks Investment Research
