Designed to provide broad exposure to the Large Cap Blend segment of the US equity market, the Goldman Sachs (NYSE:GS) Equal Weight U.S. Large Cap Equity ETF (GSEW) is a passively managed exchange traded fund launched on 09/12/2017.
The fund is sponsored by Goldman Sachs Funds. It has amassed assets over $877.50 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. They tend to be stable companies with predictable cash flows and are usually less volatile than mid and small cap companies.
Typically holding a combination of both growth and value stocks, blend ETFs also demonstrate qualities seen in value and growth investments.
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 1.42%.
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 19.70% of the portfolio. Healthcare and Industrials round out the top three.
Looking at individual holdings, Qualcomm Inc (QCOM) accounts for about 0.23% of total assets, followed by Etsy Inc (NASDAQ:ETSY) and Exact Sciences Corp (NASDAQ:EXAS).
The top 10 holdings account for about 2.2% 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 lost about -5.42% so far this year and is up roughly 15.40% in the last one year (as of 01/20/2022). In the past 52-week period, it has traded between $57.18 and $72.67.
The ETF has a beta of 1.07 and standard deviation of 23.26% for the trailing three-year period. With about 500 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 $317.18 billion in assets, SPDR S&P 500 ETF has $430.35 billion. IVV has an expense ratio of 0.03% and SPY charges 0.09%.
Bottom-Line
An increasingly popular option among retail and institutional investors, passively managed ETFs offer low costs, transparency, flexibility, and tax efficiency; they 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
QUALCOMM Incorporated (NASDAQ:QCOM): Free Stock Analysis Report
SPDR S&P 500 ETF (SPY): ETF Research Reports
Exact Sciences Corporation (EXAS): Free Stock Analysis Report
Etsy, Inc. (ETSY): Free Stock Analysis Report
iShares Core S&P 500 ETF (IVV): ETF Research Reports
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