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Is Goldman Sachs ActiveBeta U.S. Small Cap Equity ETF (GSSC) a Strong ETF Right Now?
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Making its debut on 06/28/2017, smart beta exchange traded fund Goldman Sachs ActiveBeta U.S. Small Cap Equity ETF (GSSC - Free Report) provides investors broad exposure to the Style Box - Small Cap Blend category of the market.
What Are Smart Beta ETFs?
Market cap weighted indexes were created to reflect the market, or a specific segment of the market, and the ETF industry has traditionally been dominated by products based on this strategy.
Market cap weighted indexes offer a low-cost, convenient, and transparent way of replicating market returns, and are a good option for investors who believe in market efficiency.
But, there are some investors who would rather invest in smart beta funds; these funds track non-cap weighted strategies, and are a strong option for those who prefer choosing great stocks in order to beat the market.
This kind of index follows this same mindset, as it attempts to pick stocks that have better chances of risk-return performance; non-cap weighted strategies base selection on certain fundamental characteristics, or a mix of such characteristics.
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
The fund is sponsored by Goldman Sachs Funds. It has amassed assets over $484.24 million, making it one of the average sized ETFs in the Style Box - Small Cap Blend. GSSC seeks to match the performance of the Goldman Sachs ActiveBeta U.S. Small Cap Equity Index before fees and expenses.
The Goldman Sachs ActiveBeta U.S. Small Cap Equity Index is designed to deliver exposure to equity securities of small capitalization U.S. issuers.
Cost & Other Expenses
Cost is an important factor in selecting the right ETF, and cheaper funds can significantly outperform their more expensive cousins if all other fundamentals are the same.
Operating expenses on an annual basis are 0.20% for this ETF, which makes it on par with most peer products in the space.
It's 12-month trailing dividend yield comes in at 1.33%.
Sector Exposure and Top Holdings
Even though ETFs offer diversified exposure that minimizes single stock risk, investors should also look at the actual holdings inside the fund. Luckily, most ETFs are very transparent products that disclose their holdings on a daily basis.
GSSC's heaviest allocation is in the Financials sector, which is about 19% of the portfolio. Its Industrials and Healthcare round out the top three.
Taking into account individual holdings, Abercrombie & Fitch Co (ANF - Free Report) accounts for about 0.48% of the fund's total assets, followed by Sprouts Farmers Market Inc (SFM - Free Report) and Mueller Industries Inc (MLI - Free Report) .
Its top 10 holdings account for approximately 3.52% of GSSC's total assets under management.
Performance and Risk
The ETF has gained about 3% so far this year and is up roughly 9.52% in the last one year (as of 08/12/2024). In the past 52-week period, it has traded between $51.83 and $70.53.
The fund has a beta of 0.97 and standard deviation of 21.28% for the trailing three-year period. With about 1369 holdings, it effectively diversifies company-specific risk.
Alternatives
Goldman Sachs ActiveBeta U.S. Small Cap Equity ETF is a reasonable option for investors seeking to outperform the Style Box - Small Cap Blend segment of the market. However, there are other ETFs in the space which investors could consider.
IShares Russell 2000 ETF (IWM - Free Report) tracks Russell 2000 Index and the iShares Core S&P Small-Cap ETF (IJR - Free Report) tracks S&P SmallCap 600 Index. IShares Russell 2000 ETF has $64.63 billion in assets, iShares Core S&P Small-Cap ETF has $81.75 billion. IWM has an expense ratio of 0.19% and IJR charges 0.06%.
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 - Small 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.
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Is Goldman Sachs ActiveBeta U.S. Small Cap Equity ETF (GSSC) a Strong ETF Right Now?
Making its debut on 06/28/2017, smart beta exchange traded fund Goldman Sachs ActiveBeta U.S. Small Cap Equity ETF (GSSC - Free Report) provides investors broad exposure to the Style Box - Small Cap Blend category of the market.
What Are Smart Beta ETFs?
Market cap weighted indexes were created to reflect the market, or a specific segment of the market, and the ETF industry has traditionally been dominated by products based on this strategy.
Market cap weighted indexes offer a low-cost, convenient, and transparent way of replicating market returns, and are a good option for investors who believe in market efficiency.
But, there are some investors who would rather invest in smart beta funds; these funds track non-cap weighted strategies, and are a strong option for those who prefer choosing great stocks in order to beat the market.
This kind of index follows this same mindset, as it attempts to pick stocks that have better chances of risk-return performance; non-cap weighted strategies base selection on certain fundamental characteristics, or a mix of such characteristics.
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
The fund is sponsored by Goldman Sachs Funds. It has amassed assets over $484.24 million, making it one of the average sized ETFs in the Style Box - Small Cap Blend. GSSC seeks to match the performance of the Goldman Sachs ActiveBeta U.S. Small Cap Equity Index before fees and expenses.
The Goldman Sachs ActiveBeta U.S. Small Cap Equity Index is designed to deliver exposure to equity securities of small capitalization U.S. issuers.
Cost & Other Expenses
Cost is an important factor in selecting the right ETF, and cheaper funds can significantly outperform their more expensive cousins if all other fundamentals are the same.
Operating expenses on an annual basis are 0.20% for this ETF, which makes it on par with most peer products in the space.
It's 12-month trailing dividend yield comes in at 1.33%.
Sector Exposure and Top Holdings
Even though ETFs offer diversified exposure that minimizes single stock risk, investors should also look at the actual holdings inside the fund. Luckily, most ETFs are very transparent products that disclose their holdings on a daily basis.
GSSC's heaviest allocation is in the Financials sector, which is about 19% of the portfolio. Its Industrials and Healthcare round out the top three.
Taking into account individual holdings, Abercrombie & Fitch Co (ANF - Free Report) accounts for about 0.48% of the fund's total assets, followed by Sprouts Farmers Market Inc (SFM - Free Report) and Mueller Industries Inc (MLI - Free Report) .
Its top 10 holdings account for approximately 3.52% of GSSC's total assets under management.
Performance and Risk
The ETF has gained about 3% so far this year and is up roughly 9.52% in the last one year (as of 08/12/2024). In the past 52-week period, it has traded between $51.83 and $70.53.
The fund has a beta of 0.97 and standard deviation of 21.28% for the trailing three-year period. With about 1369 holdings, it effectively diversifies company-specific risk.
Alternatives
Goldman Sachs ActiveBeta U.S. Small Cap Equity ETF is a reasonable option for investors seeking to outperform the Style Box - Small Cap Blend segment of the market. However, there are other ETFs in the space which investors could consider.
IShares Russell 2000 ETF (IWM - Free Report) tracks Russell 2000 Index and the iShares Core S&P Small-Cap ETF (IJR - Free Report) tracks S&P SmallCap 600 Index. IShares Russell 2000 ETF has $64.63 billion in assets, iShares Core S&P Small-Cap ETF has $81.75 billion. IWM has an expense ratio of 0.19% and IJR charges 0.06%.
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 - Small 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.