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

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 $484.12 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

Small cap companies have market capitalization below $2 billion. They usually have higher potential than large and mid cap companies with stocks but higher risk.

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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 1.35%.

Sector Exposure and Top Holdings

Even though ETFs offer diversified exposure that minimizes single stock risk, investors should also look at the actual holdings inside the fund. Luckily, most ETFs are very transparent products that disclose their holdings on a daily basis.

This ETF has heaviest allocation to the Industrials sector--about 20.10% of the portfolio. Financials and Information Technology round out the top three.

Looking at individual holdings, Super Micro Computer Inc (SMCI) accounts for about 1.81% of total assets, followed by Jun 24 Cme Eminirus2k (RTYM24) and Comfort Systems Usa Inc (FIX).

The top 10 holdings account for about 6.02% 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 added roughly 1.23% so far this year and is up about 17.85% in the last one year (as of 05/24/2024). In the past 52-week period, it has traded between $51.83 and $65.55.

The ETF has a beta of 0.98 and standard deviation of 21% for the trailing three-year period. With about 1297 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 Small-Cap ETF (IJR) track a similar index. While iShares Russell 2000 ETF has $60 billion in assets, iShares Core S&P Small-Cap ETF has $78.14 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.

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

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

Super Micro Computer, Inc. (SMCI) : Free Stock Analysis Report

Comfort Systems USA, Inc. (FIX) : Free Stock Analysis Report

iShares Russell 2000 ETF (IWM): ETF Research Reports

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

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Zacks Investment Research