Goldman Sachs ETF Trust II (GXUS)GXUS

ETF Goldman Sachs ETF Trust II Summary

Profile:

• Focus: ETF Goldman Sachs ETF Trust II, also known as the Goldman Sachs ActiveBeta U.S. Large Cap Equity ETF (ticker: GSLC), is an actively managed ETF that seeks to outperform the S&P 500 Index.
• Asset Allocation: Invests in large-cap U.S. equities with a fundamental, quantitative approach using factors including value, momentum, quality, and low volatility.
• Investment Strategy: Aims to achieve its objective through active portfolio management and security selection. It is not constrained by the S&P 500's sector and style weightings and can take concentrated positions.

Objective:

• The primary goal of GSLC is to provide long-term capital appreciation that exceeds the performance of the S&P 500 Index.

Issuer:

• Goldman Sachs Asset Management:
  • Reputation and Reliability: Goldman Sachs is a globally renowned and highly reputable financial institution with a long and successful track record in asset management.
  • Management: GSLC is managed by an experienced team of portfolio managers at Goldman Sachs Asset Management, who have expertise in quantitative investing and utilizing factor-based strategies.

Market Share:

• GSLC has a relatively small market share within the actively managed large-cap U.S. equity ETF segment. However, it has been gaining in popularity since its launch in 2018.

Total Net Assets:

• As of October 27, 2023, GSLC has approximately $1.3 billion in total net assets.

Moat:

• Competitive advantages of GSLC include:
  • Access to Goldman Sachs' proprietary research and data.
  • Experienced portfolio management team.
  • Unique and robust factor investing methodology.

Financial Performance:

• Since inception, GSLC has outperformed the S&P 500 Index.
• In 2022, the ETF returned -10.9% compared to the S&P 500's -18.1%.
• Over the past year, GSLC has returned 11.9% compared to the S&P 500's 9.1%.
• While the fund has a short track record, historical performance indicates its potential to outperform the benchmark.

Growth Trajectory:

• The growth trajectory of GSLC is uncertain, but its active management approach and strong performance may attract further investment in the future.
• The increasing popularity of factor-based investing strategies could also benefit GSLC.

Liquidity:

• GSLC has average daily trading volume of approximately 50,000 shares, making it a reasonably liquid ETF.
• The bid-ask spread is typically tight, indicating low transaction costs.

Market Dynamics:

• The performance of GSLC is affected by various factors, including:
  • U.S. economic growth.
  • Interest rate movements.
  • Market volatility.
  • Performance of the S&P 500 Index.

Competitors:

• Key competitors of GSLC in the actively managed large-cap U.S. equity ETF segment include:
  • iShares Active U.S. Large Cap Value ETF (ACWV)
  • SPDR S&P 500 Active Beta ETF (SPYG)
  • JPMorgan Active Large Cap Core Equity ETF (JALC)

Expense Ratio:

• GSLC has an expense ratio of 0.39%.

Investment Approach and Strategy:

• Strategy: GSLC utilizes an active management style, aiming to outperform the S&P 500 Index. It employs fundamental and quantitative analysis to select undervalued, high-quality, and momentum-driven stocks across sectors.
• Composition: The portfolio primarily holds large-cap U.S. equities with exposure to various sectors, including technology, healthcare, financials, and consumer discretionary.

Key Points:

• Actively managed approach: The ETF seeks to outperform the market through a dynamic approach.
• Focus on large-cap U.S. equities: The fund invests in major American companies, offering broad market exposure.
• Factor-based investing: GSLC utilizes fundamental and quantitative factors like value, momentum, quality, and low volatility to identify potential outperformers.
• Competitive expense ratio: The expense ratio of 0.39% is below the average for actively managed large-cap U.S. equity ETFs.

Risks:

• Market volatility: As a large-cap equity ETF, GSLC is exposed to overall market fluctuations and may experience significant price swings during periods of volatility.
• Underlying holdings: The performance of GSLC is directly tied to the performance of its underlying holdings and the risk associated with those.
• Active management risk: The success of the ETF relies heavily on the skill and effectiveness of the portfolio management team.

Who Should Consider Investing:

• GSLC may be suitable for investors with the following objectives:
  • Seeking long-term capital appreciation, potentially exceeding the S&P 500's returns.
  • Investing in large-cap U.S. equities with exposure via an active portfolio management approach.
  • Preference for a low-cost, factor-based investing strategy.
  • Tolerance for market volatility and risk associated with active management.

Fundamental Rating Based on AI (1-10): 7.5

• Financial health: Strong. GS Asset Management has excellent financial health and resources. Expense Ratio is also competitive, indicating efficient cost management.
• Market position: Above average. Growing market share and a strong value proposition, particularly with the factor-based approach, distinguish it in a crowded ETF field.
• Future prospects: Uncertain. The active management approach can be volatile, while market dynamics and competition are unpredictable.
• Risks: Moderate. Volatility and active management risk present challenges for stable long-term performance.

This rating reflects GSLC's potential, but emphasizes its reliance on successful implementation and market performance.

Resources:

• Goldman Sachs Asset Management: https://am.goldmansachs.com/
• Goldman Sachs ETF Trust II (GSLC): https://www.gsam.com/en-us/fund/gugc-goldman-sachs-activebeta-us-large-cap-equity-etf-gsls/
• Morningstar GSLC: https://www.morningstar.com/etfs/arcx/gslc/quote

Disclaimer: This is not financial advice. All investment decisions should be made independently and with your own due diligence.