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Should Goldman Sachs Equal Weight U.S. Large Cap Equity ETF (GSEW) Be on Your Investing Radar?

Looking for broad exposure to the Large Cap Blend segment of the US equity market? You should consider the Goldman Sachs Equal Weight U.S. Large Cap Equity ETF (GSEW), a passively managed exchange traded fund launched on 09/12/2017.

The fund is sponsored by Goldman Sachs Funds. It has amassed assets over $481.85 million, making it one of the average sized ETFs attempting to match the Large Cap Blend segment of the US equity market.

Why Large Cap Blend

Large cap companies usually 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 usually hold a mix of growth and value stocks as well as stocks that exhibit both value and growth characteristics.

Costs

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 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 1.59%.

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.

This ETF has heaviest allocation to the Information Technology sector--about 18.70% of the portfolio. Healthcare and Financials round out the top three.

Looking at individual holdings, Amerisourcebergen Corp (ABC) accounts for about 0.21% of total assets, followed by Avalonbay Communities Inc (AVB) and Archer-Daniels-Midland Co (ADM).

The top 10 holdings account for about 2.1% 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 13.13% so far this year and is up roughly 15.98% in the last one year (as of 12/14/2020). In the past 52-week period, it has traded between $32.44 and $57.09.

The ETF has a beta of 1.08 and standard deviation of 23.69% for the trailing three-year period. With about 497 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 good 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 $237.84 billion in assets, SPDR S&P 500 ETF has $318.97 billion. IVV has an expense ratio of 0.03% and SPY charges 0.09%.

Bottom-Line

Retail and institutional investors increasingly turn to passively managed ETFs because they offer low costs, transparency, flexibility, and tax efficiency; these kind of funds are also 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
 
Archer Daniels Midland Company (ADM): Free Stock Analysis Report
 
AmerisourceBergen Corporation (ABC): Free Stock Analysis Report
 
AvalonBay Communities, Inc. (AVB): Free Stock Analysis Report
 
SPDR S&P 500 ETF (SPY): ETF Research Reports
 
iShares Core S&P 500 ETF (IVV): ETF Research Reports
 
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