The Goldman Sachs ActiveBeta U.S. Small Cap Equity ETF (GSSC) made its debut on 06/28/2017, and is a smart beta exchange traded fund that provides 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.
Investors who believe in market efficiency should consider market cap indexes, as they replicate market returns in a low-cost, convenient, and transparent way.
But, there are some investors who would rather invest in smart beta funds; these funds track non-cap weighted strategies, and are a strong option for those who prefer choosing great stocks in order to beat the market.
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, and has been able to amass over $567.84 million, which makes it one of the average sized ETFs in the Style Box - Small Cap Blend. GSSC, before fees and expenses, 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
Cost is an important factor in selecting the right ETF, and cheaper funds can significantly outperform their more expensive cousins if all other fundamentals are the same.
Operating expenses on an annual basis are 0.20% for GSSC, making it on par with most peer products in the space.
The fund has a 12-month trailing dividend yield of 1.38%.
Sector Exposure and Top Holdings
Even though ETFs offer diversified exposure which minimizes single stock risk, it is still important to look into a fund's holdings before investing. Luckily, 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 20.20% of the portfolio. Its Industrials and Healthcare round out the top three.
When you look at individual holdings, Sprouts Farmers Market Inc (SFM) accounts for about 0.62% of the fund's total assets, followed by Mueller Industries Inc (MLI) and Corcept Therapeutics Inc (CORT).
GSSC's top 10 holdings account for about 3.98% of its total assets under management.
Performance and Risk
The ETF return is roughly 2.68% so far this year and it's up approximately 13.75% in the last one year (as of 02/18/2025). In the past 52-week period, it has traded between $60.56 and $76.22.
The ETF has a beta of 0.99 and standard deviation of 21.37% for the trailing three-year period. With about 1311 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) 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 $73.40 billion in assets, iShares Core S&P Small-Cap ETF has $88.34 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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Get it free >>Goldman Sachs ActiveBeta U.S. Small Cap Equity ETF (GSSC): ETF Research Reports
Mueller Industries, Inc. (MLI) : Free Stock Analysis Report
Corcept Therapeutics Incorporated (CORT) : 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
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
