Goldman Sachs Asset Management rolled out the cheapest equally weighted stock exchange traded fund Thursday, helping investors utilize an alternative way to track large-cap U.S. companies in an extend bull market environment.
On Thursday, GSAM launched the Goldman Sachs Equal Weight U.S. Large Cap Equity ETF (BATS: GSEW). GSEW comes with a low 0.09% expense ratio – to put this in perspective, equally weighted index-based ETFs have an average 0.66% expense ratio, according to XTF data, and SPDR S&P 500 High Dividend ETF (NYSEArca: SPYD) was previously the cheapest equally weighted option on the block with a 0.12% expense ratio.
“GSEW seeks to help investors looking for a low cost way to avoid market cap biases, by allocating evenly to the largest U.S. companies, independent of their relative size,” Michael Crinieri, GSAM’s Global Head of ETF Strategy, said in a note.
The Equal Weight U.S. Large Cap Equity ETF tries to reflect the performance of the Solactive US Large Cap Equal Weight Index, which consists of about 500 of the largest U.S. companies and equally weights holdings so that each component is approximately 0.2% of index on rebalance, according to a prospectus sheet.
“Building on the market-cap- weighted Solactive US Large Cap Index (GTR), the Solactive US Large Cap Equal Weight Index provides an equal weight version of that benchmark and an innovative solution to help investors potentially avoid excessive concentration into larger U.S. companies. We’re excited to once again serve as an index provider to GSAM ETF through the creation of such a timely and unique index,” Steffen Scheuble, CEO of Solactive AG, said in a separate note.