Making its debut on 09/12/2017, smart beta exchange traded fund Goldman Sachs Equal Weight U.S. Large Cap Equity ETF (GSEW Quick QuoteGSEW - Free Report) provides investors 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.

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.

There are some investors, though, who think it's possible to beat the market with great stock selection; this group likely invests in another class of funds known as smart beta, which track non-cap weighted strategies.

Based on specific fundamental characteristics, or a combination of such, these indexes attempt to pick stocks that have a better chance of risk-return performance.

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

Managed by Goldman Sachs Funds, GSEW has amassed assets over $632.10 million, making it one of the average sized 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

For ETF investors, expense ratios are an important factor when considering a fund's return; in the long-term, cheaper funds actually have the ability to outperform their more expensive cousins if all other things remain the same.

With one of the least expensive products in the space, this ETF has annual operating expenses of 0.09%.

GSEW's 12-month trailing dividend yield is 1.53%.

Performance and Risk

So far this year, GSEW return is roughly 7.11%, and was up about 25.81% in the last one year (as of 03/21/2024). During this past 52-week period, the fund has traded between $56.58 and $71.83.

GSEW has a beta of 1.05 and standard deviation of 17.92% for the trailing three-year period. With about 498 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 Quick QuoteIVV - Free Report) tracks S&P 500 Index and the SPDR S&P 500 ETF (SPY Quick QuoteSPY - Free Report) tracks S&P 500 Index. IShares Core S&P 500 ETF has $455.90 billion in assets, SPDR S&P 500 ETF has $516.87 billion. IVV has an expense ratio of 0.03% and SPY charges 0.09%.

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.