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

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Launched on 03/15/2022, the Goldman Sachs ActiveBeta World Low Vol Plus Equity ETF (GLOV - Free Report) is a smart beta exchange traded fund offering broad exposure to the Broad Developed World ETFs category of the market.

What Are Smart Beta ETFs?

For a long time now, the ETF industry has been flooded with products based on market capitalization weighted indexes, which are designed to represent the broader market or a particular market segment.

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.

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.

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.

While this space offers a number of choices to investors, including simplest equal-weighting, fundamental weighting and volatility/momentum based weighting methodologies, not all these strategies have been able to deliver superior results.

Fund Sponsor & Index

The fund is managed by Goldman Sachs Funds. GLOV has been able to amass assets over $865.62 million, making it one of the average sized ETFs in the Broad Developed World ETFs. This particular fund seeks to match the performance of the GOLDMAN SACHS ACTBT WORLD LW VL PL EQ ID before fees and expenses.

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

Since cheaper funds tend to produce better results than more expensive funds, assuming all other factors remain equal, it is important for investors to pay attention to an ETF's expense ratio.

Annual operating expenses for this ETF are 0.25%, making it on par with most peer products in the space.

It has a 12-month trailing dividend yield of 1.91%.

Sector Exposure and Top Holdings

Most ETFs are very transparent products, and disclose their holdings on a daily basis. ETFs also offer diversified exposure, which minimizes single stock risk, though it's still important for investors to research a fund's holdings.

Looking at individual holdings, Apple Inc (AAPL - Free Report) accounts for about 3.31% of total assets, followed by Microsoft Corp (MSFT - Free Report) and Oreilly Automotive Inc (ORLY - Free Report) .

The top 10 holdings account for about 13.96% of total assets under management.

Performance and Risk

The ETF has gained about 6.39% so far this year and was up about 17.76% in the last one year (as of 04/10/2024). In the past 52-week period, it has traded between $38.70 and $47.02.

The ETF has a beta of 0.75 and standard deviation of 13.84% 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 $19.49 billion in assets, Vanguard Total World Stock ETF has $35.79 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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