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Is Goldman Sachs ActiveBeta World Low Vol Plus Equity ETF (GLOV) a Strong ETF Right Now?

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The Goldman Sachs ActiveBeta World Low Vol Plus Equity ETF (GLOV - Free Report) made its debut on 03/15/2022, and is a smart beta exchange traded fund that provides broad exposure to the Broad Developed World ETFs 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.

However, some investors believe in the possibility of beating the market through exceptional stock selection, and choose a different type of fund that tracks non-cap weighted strategies: smart beta.

Non-cap weighted indexes try to choose stocks that have a better chance of risk-return performance, which is based on specific fundamental characteristics, or a mix of other such characteristics.

Even though this space provides many choices to investors--think one of the simplest methodologies like equal-weighting and more complicated ones like fundamental and volatility/momentum based weighting--not all have been able to deliver first-rate results.

Fund Sponsor & Index

The fund is managed by Goldman Sachs Funds, and has been able to amass over $814.27 million, which makes it one of the average sized ETFs in the Broad Developed World ETFs. This particular fund, before fees and expenses, seeks to match the performance of the GOLDMAN SACHS ACTBT WORLD LW VL PL EQ ID.

The Goldman Sachs ActiveBeta World Low Vol Plus Equity Index delivers exposure to large and mid-capitalization equity securities of developed market issuers, including the United States.

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.

Annual operating expenses for this ETF are 0.25%, making it one of the cheaper products in the space.

It's 12-month trailing dividend yield comes in at 2.01%.

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.

Taking into account individual holdings, Apple Inc (AAPL - Free Report) accounts for about 3.31% of the fund's total assets, followed by Microsoft Corp (MSFT - Free Report) and Oreilly Automotive Inc (ORLY - Free Report) .

GLOV's top 10 holdings account for about 13.96% of its total assets under management.

Performance and Risk

So far this year, GLOV has gained about 2.50%, and it's up approximately 15.30% in the last one year (as of 02/07/2024). During this past 52-week period, the fund has traded between $37.90 and $44.92.

The ETF has a beta of 0.76 and standard deviation of 14.28% for the trailing three-year period. With about 391 holdings, it effectively diversifies company-specific risk.

Alternatives

Goldman Sachs ActiveBeta World Low Vol Plus Equity ETF is a reasonable option for investors seeking to outperform the Broad Developed World ETFs segment of the market. However, there are other ETFs in the space which investors could consider.

IShares MSCI ACWI ETF (ACWI - Free Report) tracks MSCI All Country World Index and the Vanguard Total World Stock ETF (VT - Free Report) tracks FTSE Global All Cap Index. IShares MSCI ACWI ETF has $18.90 billion in assets, Vanguard Total World Stock ETF has $33.10 billion. ACWI has an expense ratio of 0.32% and VT charges 0.07%.

Investors looking for cheaper and lower-risk options should consider traditional market cap weighted ETFs that aim to match the returns of the Broad Developed World ETFs.

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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