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

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Looking for broad exposure to the Small Cap Blend segment of the US equity market? You should consider the Goldman Sachs ActiveBeta U.S. Small Cap Equity ETF (GSSC), a passively managed exchange traded fund launched on 06/28/2017.

The fund is sponsored by Goldman Sachs Funds. It has amassed assets over $437.24 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

There's a lot of potential to investing in small cap companies, but with market capitalization below $2 billion, that high potential comes with even 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

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

It has a 12-month trailing dividend yield of 0.74%.

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 17.70% of the portfolio. Industrials and Healthcare 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 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 22.27% so far this year and was up about 43.54% in the last one year (as of 10/19/2021). In the past 52-week period, it has traded between $43.03 and $65.96.

The ETF has a beta of 0.96 and standard deviation of 28.19% 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 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 SmallCap ETF (IJR) track a similar index. While iShares Russell 2000 ETF has $68.74 billion in assets, iShares Core S&P SmallCap ETF has $70.60 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. (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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Zacks Investment Research

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