Designed to provide broad exposure to the Small Cap Blend segment of the US equity market, the Goldman Sachs (NYSE:GS) ActiveBeta U.S. Small Cap Equity ETF (GSSC) is a passively managed exchange traded fund launched on 06/28/2017.
The fund is sponsored by Goldman Sachs Funds. It has amassed assets over $423.06 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.
Typically holding a combination of both growth and value stocks, blend ETFs also demonstrate qualities seen in value and growth investments.
Costs
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 counterparts, other things remaining the same.
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 0.75%.
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 Financials sector--about 16.70% of the portfolio. Healthcare and Industrials round out the top three.
Looking at individual holdings, Usd U.s. Dollar (USD) accounts for about 0.43% of total assets, followed by Lattice (OTC:LTTC) Semiconductor Corp (LSCC) and Amc Entertainment Holdings Inc (AMC).
The top 10 holdings account for about 3.06% 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 return is roughly 20.11% so far this year and was up about 59.08% in the last one year (as of 09/27/2021). In the past 52-week period, it has traded between $41.97 and $65.96.
The ETF has a beta of 0.97 and standard deviation of 28.23% for the trailing three-year period. With about 1446 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 sufficient 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 SmallCap ETF (IJR) track a similar index. While iShares Russell 2000 ETF has $67.63 billion in assets, iShares Core S&P SmallCap ETF has $68.92 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
Lattice Semiconductor Corporation (LSCC): Free Stock Analysis Report
iShares Russell 2000 ETF (IWM): ETF Research Reports
AMC Entertainment Holdings, Inc. (NYSE:AMC): Free Stock Analysis Report
iShares Core S&P SmallCap ETF (IJR): ETF Research Reports
ProShares Ultra Semiconductors (USD): ETF Research Reports
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