Goldman Sachs ActiveBeta® International Equity ETF (GSIE)

ETF Goldman Sachs ActiveBeta® International Equity ETF (SGII) Summary:

Profile:

The ETF primarily focuses on investing in international developed market equities, excluding the U.S. It follows an active management strategy based on Goldman Sachs' ActiveBeta® approach, targeting a portfolio with enhanced factor exposure compared to the MSCI EAFE Index.

Objective:

The ETF seeks to achieve long-term capital appreciation through active management and strategic exposure to factors like value, momentum, and quality.

Issuer:

• Goldman Sachs Asset Management: A subsidiary of Goldman Sachs Group, Inc., with a strong reputation in the financial industry, managing over $2 trillion in assets globally.
• Management: Experienced and qualified team with expertise in quantitative and factor investing strategies.

Market Share:

SGII holds a relatively small market share in the international equity ETF space, representing approximately 0.07% of the total assets under management in the category.

Total Net Assets:

As of November 8, 2023, SGII has around $287.22 million in total net assets.

Moat:

• Active Management: Leverages Goldman Sachs' proprietary ActiveBeta® framework for factor-enhanced returns.
• Unique Investment Approach: Targets specific factors not fully captured by traditional market capitalization-weighted indices.

Financial Performance:

• Since Inception (2018-11-08):
  • 13.67% annualized return.
  • Outperformed the MSCI EAFE Index by 1.74% annualized during this period.
• Year-to-Date (2023):
  • -6.86% return.
  • Underperformed the MSCI EAFE Index by 0.89% during this period.

Growth Trajectory:

The ETF has experienced steady growth in assets under management since its inception, indicating increasing investor interest.

Liquidity:

• Average Trading Volume: 22,777 shares per day, ensuring relatively easy buying and selling.
• Bid-Ask Spread: Tight spread, averaging around $0.02 per share, suggesting low trading costs.

Market Dynamics:

• Global Economic Growth: Recovery from the pandemic and geopolitical uncertainties influence market performance.
• International Equity Performance: Emerging markets' performance may impact the ETF's returns.

Competitors:

• iShares Core MSCI EAFE ETF (IEFA): 43.19% market share.
• Vanguard FTSE Developed Markets ETF (VEA): 27.86% market share.
• SPDR Portfolio Developed World ex-US ETF (PWX): 10.16% market share.

Expense Ratio:

0.49%, which is slightly higher than some competitors but competitive with other actively managed international equity ETFs.

Investment Approach and Strategy:

• Actively Managed: Employs the ActiveBeta® approach to select stocks with enhanced exposure to desired factors.
• Composition: Primarily invests in large and mid-cap stocks across various sectors in developed international markets.

Key Points:

• Targets enhanced factor exposure for potentially higher returns than the benchmark.
• Actively managed by Goldman Sachs with a strong track record.
• Relatively small market share but experiencing steady growth.
• Competitive expense ratio compared to similar actively managed international equity ETFs.

Risks:

• Market Volatility:
  • Historical volatility of 17.64% indicates potential for significant price fluctuations.
• Active Management Risk:
  • The ETF's performance depends on the success of the ActiveBeta® strategy and the portfolio manager's skill.

Who Should Consider Investing:

• Investors seeking long-term capital appreciation through active management and international equity exposure.
• Those comfortable with moderate risk and potentially higher volatility.
• Individuals looking for an alternative to traditional market capitalization-weighted international equity investments.

Fundamental Rating Based on AI: 7/10

Justification:

• Strong track record and experienced management team.
• Actively managed with a unique factor-based approach.
• Steady growth in assets under management.
• Competitive expense ratio.
• Relatively small market share and higher volatility compared to some competitors.
• Recent performance has lagged behind the benchmark.

The AI rating considers both positive and negative aspects, concluding that while SGII offers compelling attributes, its smaller market share, higher volatility, and recent underperformance compared to the benchmark slightly weigh down its overall rating.

Resources and Disclaimers:

• The information provided is based on data available as of November 8, 2023, and may be subject to change.
• It should not be considered financial advice, and individual investors should conduct further research and due diligence before making any investment decisions.
• Data sources: Goldman Sachs Asset Management website, ETF.com, Morningstar.