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Should Goldman Sachs ActiveBeta U.S. Large Cap Equity ETF (GSLC) Be on Your Investing Radar?

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Launched on 09/17/2015, the Goldman Sachs ActiveBeta U.S. Large Cap Equity ETF (GSLC - Free Report) is a passively managed exchange traded fund designed to provide a broad exposure to the Large Cap Blend segment of the US equity market.

The fund is sponsored by Goldman Sachs Funds. It has amassed assets over $11.49 billion, making it one of the largest ETFs attempting to match the Large Cap Blend segment of the US equity market.

Why Large Cap Blend

Companies that find themselves in the large cap category typically have a market capitalization above $10 billion. Considered a more stable option, large cap companies boast more predictable cash flows and are less volatile than their mid and small cap counterparts.

Blend ETFs are aptly named, since they tend to hold a mix of growth and value stocks, as well as show characteristics of both kinds of equities.

Costs

Investors should also pay attention to an ETF's expense ratio. Lower cost products will produce better results than those with a higher cost, assuming all other metrics remain the same.

Annual operating expenses for this ETF are 0.09%, making it one of the least expensive products in the space.

It has a 12-month trailing dividend yield of 1.38%.

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.

This ETF has heaviest allocation to the Information Technology sector--about 28.50% of the portfolio. Healthcare and Consumer Discretionary round out the top three.

Looking at individual holdings, Apple Inc (AAPL - Free Report) accounts for about 6.49% of total assets, followed by Microsoft Corp (MSFT - Free Report) and Amazon.com Inc (AMZN - Free Report) .

The top 10 holdings account for about 26.33% of total assets under management.

Performance and Risk

GSLC seeks to match the performance of the Goldman Sachs ActiveBeta U.S. Large Cap Equity Index before fees and expenses. The Goldman Sachs ActiveBeta U.S. Large Cap Equity Index is designed to deliver exposure to equity securities of large-capitalization U.S. issuers.

The ETF has gained about 0.44% so far this year and it's up approximately 21.20% in the last one year (as of 01/15/2024). In the past 52-week period, it has traded between $76.69 and $94.22.

The ETF has a beta of 0.98 and standard deviation of 17.34% for the trailing three-year period, making it a medium risk choice in the space. With about 452 holdings, it effectively diversifies company-specific risk.

Alternatives

Goldman Sachs ActiveBeta U.S. Large Cap Equity ETF carries a Zacks ETF Rank of 3 (Hold), which is based on expected asset class return, expense ratio, and momentum, among other factors. Thus, GSLC is a sufficient option for those seeking exposure to the Style Box - Large Cap Blend area of the market. Investors might also want to consider some other ETF options in the space.

The iShares Core S&P 500 ETF (IVV - Free Report) and the SPDR S&P 500 ETF (SPY - Free Report) track a similar index. While iShares Core S&P 500 ETF has $403.29 billion in assets, SPDR S&P 500 ETF has $484.93 billion. IVV has an expense ratio of 0.03% and SPY charges 0.09%.

Bottom-Line

Passively managed ETFs are becoming increasingly popular with institutional as well as retail investors due to their low cost, transparency, flexibility and tax efficiency. They are excellent vehicles for long term investors.

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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