Back to top

Image: Bigstock

Is Goldman Sachs ActiveBeta U.S. Small Cap Equity ETF (GSSC) a Strong ETF Right Now?

Read MoreHide Full Article

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?

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 work great for investors who believe in market efficiency. They provide a low-cost, convenient and transparent way of replicating market returns.

There are some investors, though, who think it's possible to beat the market with great stock selection; this group likely invests in another class of funds known as smart beta, which track non-cap weighted strategies.

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.

This area offers many different investment choices, such as simplest equal-weighting, fundamental weighting and volatility/momentum based weighting methodologies; however, not all of these strategies can deliver superior results.

Fund Sponsor & Index

The fund is managed by Goldman Sachs Funds. GSSC has been able to amass assets over $460.81 million, making it one of the average sized ETFs in the Style Box - Small Cap Blend. Before fees and expenses, this particular fund seeks to match the performance of the Goldman Sachs ActiveBeta U.S. Small Cap Equity Index.

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.

Operating expenses on an annual basis are 0.20% for GSSC, making it on par with most peer products in the space.

GSSC's 12-month trailing dividend yield is 1.45%.

Sector Exposure and Top Holdings

ETFs offer diversified exposure and thus minimize single stock risk, but it is still important to delve into a fund's holdings before investing. Most ETFs are very transparent products and many disclose their holdings on a daily basis.

Representing 19.70% of the portfolio, the fund has heaviest allocation to the Industrials sector; Financials and Information Technology round out the top three.

Looking at individual holdings, Sep 23 Cme Eminirus2k (RTYU3) accounts for about 0.85% of total assets, followed by Super Micro Computer Inc (SMCI - Free Report) and Atkore Inc (ATKR - Free Report) .

GSSC's top 10 holdings account for about 4.43% of its total assets under management.

Performance and Risk

The ETF has added roughly 5.13% so far this year and is down about -1.41% in the last one year (as of 12/01/2023). In the past 52-week period, it has traded between $51.83 and $61.36.

The ETF has a beta of 0.99 and standard deviation of 21.74% for the trailing three-year period. With about 1365 holdings, it effectively diversifies company-specific risk.


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 $55.04 billion in assets, iShares Core S&P Small-Cap ETF has $67.71 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.

Published in