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

Launched on 09/12/2017, the Goldman Sachs Equal Weight U.S. Large Cap Equity ETF (GSEW) is a passively managed exchange traded fund designed to provide a 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 $787.87 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 find themselves in the large cap category typically 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.

Typically holding a combination of both growth and value stocks, blend ETFs also demonstrate qualities seen in value and growth investments.

Costs

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.

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 1.18%.

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.

This ETF has heaviest allocation to the Information Technology sector--about 21.30% of the portfolio. Healthcare and Industrials round out the top three.

Looking at individual holdings, Usd U.s. Dollar (USD) accounts for about 0.41% of total assets, followed by Docusign Inc (DOCU) and Roku Inc (ROKU).

The top 10 holdings account for about 2.71% 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 added roughly 20.04% so far this year and was up about 47.95% in the last one year (as of 07/12/2021). In the past 52-week period, it has traded between $46.62 and $67.92.

The ETF has a beta of 1.08 and standard deviation of 23.59% 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 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 reasonable 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 $291.84 billion in assets, SPDR S&P 500 ETF has $383.52 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
 
iShares Core S&P 500 ETF (IVV): ETF Research Reports
 
ProShares Ultra Semiconductors (USD): ETF Research Reports
 
Roku, Inc. (ROKU): Free Stock Analysis Report
 
DocuSign Inc. (DOCU): Free Stock Analysis Report
 
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