Launched on 06/28/2017, the Goldman Sachs ActiveBeta U.S. Small Cap Equity ETF (GSSC) is a passively managed exchange traded fund designed to provide a broad exposure to the Small Cap Blend segment of the US equity market.

The fund is sponsored by Goldman Sachs Funds. It has amassed assets over $489.89 million, making it one of the average sized ETFs attempting to match the Small Cap Blend segment of the US equity market.

Why Small Cap Blend

Sitting at a market capitalization below $2 billion, small cap companies tend to be high-potential stocks compared to its large and mid cap counterparts, but come with higher risk.

Blend ETFs usually hold a mix of growth and value stocks as well as stocks that exhibit both value and growth characteristics.

Costs

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 0.20%, putting it on par with most peer products in the space.

It has a 12-month trailing dividend yield of 1.59%.

Sector Exposure and Top Holdings

ETFs offer a 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.

This ETF has heaviest allocation to the Financials sector--about 20.70% of the portfolio. Industrials and Healthcare round out the top three.

Looking at individual holdings, Mar 25 Cme Eminirus2k (RTYH25) accounts for about 1.10% of total assets, followed by Sprouts Farmers Market Inc (SFM) and Mueller Industries Inc (MLI).

The top 10 holdings account for about 5.06% of total assets under management.

Performance and Risk

GSSC 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.

The ETF has lost about -12.49% so far this year and is down about -4.71% in the last one year (as of 04/04/2025). In the past 52-week period, it has traded between $60.32 and $76.22.

The ETF has a beta of 0.97 and standard deviation of 21.51% for the trailing three-year period. With about 1299 holdings, it effectively diversifies company-specific risk.

Alternatives

Goldman Sachs ActiveBeta U.S. Small 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, GSSC is a reasonable option for those seeking exposure to the Style Box - Small Cap Blend area of the market. Investors might also want to consider some other ETF options in the space.

The iShares Russell 2000 ETF (IWM) and the iShares Core S&P Small-Cap ETF (IJR) track a similar index. While iShares Russell 2000 ETF has $60.40 billion in assets, iShares Core S&P Small-Cap ETF has $74.39 billion. IWM has an expense ratio of 0.19% and IJR charges 0.06%.

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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Goldman Sachs ActiveBeta U.S. Small Cap Equity ETF (GSSC): ETF Research Reports

Mueller Industries, Inc. (MLI) : Free Stock Analysis Report

iShares Russell 2000 ETF (IWM): ETF Research Reports

Sprouts Farmers Market, Inc. (SFM) : Free Stock Analysis Report

iShares Core S&P Small-Cap ETF (IJR): ETF Research Reports

This article originally published on Zacks Investment Research (zacks.com).

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