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Is Goldman Sachs ActiveBeta U.S. Small Cap Equity ETF (GSSC) a Strong ETF Right Now?
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Designed to provide broad exposure to the Style Box - Small Cap Blend category of the market, the Goldman Sachs ActiveBeta U.S. Small Cap Equity ETF (GSSC - Free Report) is a smart beta exchange traded fund launched on 06/28/2017.
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.
If you're the kind of investor who would rather try and beat the market through good stock selection, then smart beta funds are your best choice; this fund class is known for tracking non-cap weighted strategies.
By attempting to pick stocks that have a better chance of risk-return performance, non-cap weighted indexes are based on certain fundamental characteristics, or a combination of such.
Methodologies like equal-weighting, one of the simplest options out there, fundamental weighting, and volatility/momentum based weighting are all choices offered to investors in this space, but not all of them can deliver superior returns.
Fund Sponsor & Index
The fund is managed by Goldman Sachs Funds. GSSC has been able to amass assets over $482.76 million, making it one of the average sized ETFs in the Style Box - Small Cap Blend. This particular fund 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
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.
With on par with most peer products in the space, this ETF has annual operating expenses of 0.20%.
GSSC's 12-month trailing dividend yield is 1.35%.
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.
This ETF has heaviest allocation in the Industrials sector - about 19.50% of the portfolio. Financials and Information Technology round out the top three.
Looking at individual holdings, Jun 23 Cme Eminirus2k (RTYM3) accounts for about 1.16% of total assets, followed by Atkore Inc (ATKR - Free Report) and Emcor Group Inc (EME - Free Report) .
Its top 10 holdings account for approximately 4.28% of GSSC's total assets under management.
Performance and Risk
Year-to-date, the Goldman Sachs ActiveBeta U.S. Small Cap Equity ETF has added about 9.51% so far, and is up about 12.84% over the last 12 months (as of 07/18/2023). GSSC has traded between $50.18 and $61.36 in this past 52-week period.
The fund has a beta of 0.99 and standard deviation of 22.27% for the trailing three-year period. With about 1249 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 $56.55 billion in assets, iShares Core S&P Small-Cap ETF has $71.12 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?
Designed to provide broad exposure to the Style Box - Small Cap Blend category of the market, the Goldman Sachs ActiveBeta U.S. Small Cap Equity ETF (GSSC - Free Report) is a smart beta exchange traded fund launched on 06/28/2017.
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.
If you're the kind of investor who would rather try and beat the market through good stock selection, then smart beta funds are your best choice; this fund class is known for tracking non-cap weighted strategies.
By attempting to pick stocks that have a better chance of risk-return performance, non-cap weighted indexes are based on certain fundamental characteristics, or a combination of such.
Methodologies like equal-weighting, one of the simplest options out there, fundamental weighting, and volatility/momentum based weighting are all choices offered to investors in this space, but not all of them can deliver superior returns.
Fund Sponsor & Index
The fund is managed by Goldman Sachs Funds. GSSC has been able to amass assets over $482.76 million, making it one of the average sized ETFs in the Style Box - Small Cap Blend. This particular fund 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
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.
With on par with most peer products in the space, this ETF has annual operating expenses of 0.20%.
GSSC's 12-month trailing dividend yield is 1.35%.
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.
This ETF has heaviest allocation in the Industrials sector - about 19.50% of the portfolio. Financials and Information Technology round out the top three.
Looking at individual holdings, Jun 23 Cme Eminirus2k (RTYM3) accounts for about 1.16% of total assets, followed by Atkore Inc (ATKR - Free Report) and Emcor Group Inc (EME - Free Report) .
Its top 10 holdings account for approximately 4.28% of GSSC's total assets under management.
Performance and Risk
Year-to-date, the Goldman Sachs ActiveBeta U.S. Small Cap Equity ETF has added about 9.51% so far, and is up about 12.84% over the last 12 months (as of 07/18/2023). GSSC has traded between $50.18 and $61.36 in this past 52-week period.
The fund has a beta of 0.99 and standard deviation of 22.27% for the trailing three-year period. With about 1249 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 $56.55 billion in assets, iShares Core S&P Small-Cap ETF has $71.12 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.