Goldman Sachs ActiveBeta® U.S. Small Cap Equity ETF (GSSC)

US ETF: Goldman Sachs ActiveBeta® U.S. Small Cap Equity ETF (GSSC)

Profile:

GSSC is an actively managed ETF that invests primarily in small-cap U.S. equities. It utilizes a smart beta strategy, combining fundamental and quantitative factors to identify stocks with potential for outperformance. The ETF focuses on factors such as value, momentum, quality, and low volatility.

Objective:

The primary goal of GSSC is to generate long-term capital appreciation by exceeding the performance of the Russell 2000 Index.

Issuer:

Goldman Sachs Asset Management (GSAM)

• Reputation and Reliability: GSAM is a leading global asset management firm with a strong track record and reputation for excellence. It manages over $2 trillion in assets for institutional and individual investors.
• Management: The ETF is managed by a team of experienced portfolio managers with expertise in quantitative and fundamental analysis.

Market Share:

GSSC holds a market share of approximately 0.5% within the U.S. small-cap equity ETF category.

Total Net Assets:

As of November 2023, GSSC has approximately $1.5 billion in total net assets.

Moat:

• Unique Strategy: GSSC's smart beta approach combines quantitative and fundamental analysis, offering a differentiated approach to small-cap investing.
• Experienced Management: The ETF benefits from the expertise of GSAM's experienced portfolio management team.
• Active Management: Active management allows the ETF to adapt to changing market conditions and potentially outperform the benchmark.

Financial Performance:

• Historical Performance: GSSC has outperformed the Russell 2000 Index since its inception in 2018.
• Benchmark Comparison: The ETF has consistently outperformed the Russell 2000 Index over various timeframes.

Growth Trajectory:

The U.S. small-cap market is expected to continue growing, driven by factors such as innovation and economic expansion. This bodes well for GSSC's future growth potential.

Liquidity:

• Average Trading Volume: GSSC has a healthy average trading volume, ensuring easy buying and selling of shares.
• Bid-Ask Spread: The bid-ask spread is relatively tight, indicating low transaction costs.

Market Dynamics:

• Economic Indicators: Strong economic growth can benefit small-cap companies, which are typically more sensitive to economic cycles.
• Sector Growth Prospects: The small-cap sector offers exposure to high-growth companies with significant potential for future expansion.
• Interest Rates: Rising interest rates can impact small-cap company valuations and overall market performance.

Competitors:

• iShares Russell 2000 Value ETF (IWN)
• Vanguard Small-Cap Value ETF (VBR)
• SPDR S&P 600 Small Cap Value ETF (SLYV)

Expense Ratio:

GSSC has an expense ratio of 0.25%, which is competitive compared to other actively managed small-cap ETFs.

Investment Approach and Strategy:

• Strategy: GSSC employs a smart beta approach, actively selecting stocks based on a combination of fundamental and quantitative factors.
• Composition: The ETF primarily invests in small-cap U.S. equities across various sectors.

Key Points:

• Actively managed ETF targeting U.S. small-cap equities.
• Utilizes a smart beta strategy for outperformance potential.
• Strong track record of exceeding benchmark performance.
• Experienced management team from GSAM.
• Competitive expense ratio.

Risks:

• Market Risk: The ETF is subject to market risks associated with small-cap equities, such as higher volatility and potential for greater losses.
• Active Management Risk: Active management strategies involve a higher risk of underperformance compared to passively managed index funds.
• Liquidity Risk: While the ETF has a healthy trading volume, lower liquidity in small-cap stocks could impact trading efficiency.

Who Should Consider Investing:

• Investors seeking exposure to U.S. small-cap equities with the potential for outperformance.
• Investors comfortable with the risks associated with actively managed ETFs and small-cap investing.

Fundamental Rating Based on AI:

7.5/10

GSSC receives a 7.5/10 rating based on an AI analysis. The ETF benefits from a strong track record, experienced management, and a differentiated investment strategy. However, investors should be aware of the risks associated with active management and small-cap investing.

Resources and Disclaimers:

• Goldman Sachs ActiveBeta® U.S. Small Cap Equity ETF website: https://www.gsam.com/americas/us/en-us/individual-investor/etfs/goldman-sachs-activebeta-us-small-cap-equity-etf
• Morningstar ETF Report: https://www.morningstar.com/etfs/arcx/gssc/quote.html
• Disclaimer: This information is for educational purposes only and should not be considered investment advice. Please consult with a financial professional before making any investment decisions.