Making its debut on 06/28/2017, smart beta exchange traded fund Goldman Sachs ActiveBeta U.S. Small Cap Equity ETF (GSSC) provides investors broad exposure to the Style Box - Small Cap Blend category of the market.
Market cap weighted indexes were created to reflect the market, or a specific segment of the market, and the ETF industry has traditionally been dominated by products based on this strategy.
Investors who believe in market efficiency should consider market cap indexes, as they replicate market returns in a low-cost, convenient, and transparent way.
On the other hand, some investors who believe that it is possible to beat the market by superior stock selection opt to invest in another class of funds that track non-cap weighted strategies--popularly known as smart beta.
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.
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.
The fund is managed by Goldman Sachs Funds, and has been able to amass over $515.11 million, which makes it one of the average sized ETFs in the Style Box - Small Cap Blend. Before fees and expenses, GSSC 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.
Expense ratios are an important factor in the return of an ETF and in the long-term, cheaper funds can significantly outperform their more expensive cousins, other things remaining the same.
Annual operating expenses for GSSC are 0.20%, which makes it on par with most peer products in the space.
It has a 12-month trailing dividend yield of 1.23%.
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.
GSSC's heaviest allocation is in the Financials sector, which is about 19.30% of the portfolio. Its Industrials and Healthcare round out the top three.
Taking into account individual holdings, Sprouts Farmers Market Inc (SFM) accounts for about 0.51% of the fund's total assets, followed by Mueller Industries Inc (MLI) and Jackson Financial Inc (JXN).
The top 10 holdings account for about 3.86% of total assets under management.
The ETF has added about 11.20% so far this year and it's up approximately 30.16% in the last one year (as of 10/15/2024). In the past 52-week period, it has traded between $51.83 and $70.53.
GSSC has a beta of 0.96 and standard deviation of 21.52% for the trailing three-year period. With about 1340 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) tracks Russell 2000 Index and the iShares Core S&P Small-Cap ETF (IJR) tracks S&P SmallCap 600 Index. IShares Russell 2000 ETF has $69.73 billion in assets, iShares Core S&P Small-Cap ETF has $86.45 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.
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
$Jackson Financial Inc(JXN-A)$. (JXN) : Free Stock Analysis Report
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