The Goldman Sachs ActiveBeta U.S. Small Cap Equity ETF (GSSC) made its debut on 06/28/2017, and is a smart beta exchange traded fund that provides broad exposure to the Style Box - Small Cap Blend category of the market.
What Are Smart Beta ETFs?
The ETF industry has long been dominated by products based on market cap weighted indexes, a strategy created to reflect the market or a particular market segment.
Market cap weighted indexes work great for investors who believe in market efficiency. They provide a low-cost, convenient and transparent way of replicating market returns.
If you're the kind of investor who would rather try and beat the market through good stock selection, then smart beta funds are your best choice; this fund class is known for tracking non-cap weighted strategies.
Based on specific fundamental characteristics, or a combination of such, these indexes attempt to pick stocks that have a better chance of risk-return performance.
Even though this space provides many choices to investors--think one of the simplest methodologies like equal-weighting and more complicated ones like fundamental and volatility/momentum based weighting--not all have been able to deliver first-rate results.
Fund Sponsor & Index
Because the fund has amassed over $692.57 million, this makes it one of the average sized ETFs in the Style Box - Small Cap Blend. GSSC is managed by Goldman Sachs Funds. GSSC, before fees and expenses, seeks to match the performance of the Goldman Sachs ActiveBeta U.S. Small Cap Equity Index.
The Goldman Sachs ActiveBeta U.S. Small Cap Equity Index is designed to deliver exposure to equity securities of small capitalization U.S. issuers.
Cost & Other Expenses
Expense ratios are an important factor in the return of an ETF and in the long-term, cheaper funds can significantly outperform their more expensive cousins, other things remaining the same.
Annual operating expenses for GSSC are 0.20%, which makes it on par with most peer products in the space.
The fund has a 12-month trailing dividend yield of 1.45%.
Sector Exposure and Top Holdings
Most ETFs are very transparent products, and disclose their holdings on a daily basis. ETFs also offer diversified exposure, which minimizes single stock risk, though it's still important for investors to research a fund's holdings.
For GSSC, it has heaviest allocation in the Financials sector --about 19.2% of the portfolio --while Industrials and Healthcare round out the top three.
When you look at individual holdings, Credo Technology Group Holding Ltd (CRDO) accounts for about 0.47% of the fund's total assets, followed by Ies Holdings Inc. (IESC) and Commvault Systems Inc. (CVLT).
Its top 10 holdings account for approximately 3.52% of GSSC's total assets under management.
Performance and Risk
Year-to-date, the Goldman Sachs ActiveBeta U.S. Small Cap Equity ETF has gained about 8.45% so far, and is up roughly 8.95% over the last 12 months (as of 10/31/2025). GSSC has traded between $55.86 $76.75 in this past 52-week period.
The fund has a beta of 1.06 and standard deviation of 20.67% for the trailing three-year period. With about 1348 holdings, it effectively diversifies company-specific risk .
Alternatives
Goldman Sachs ActiveBeta U.S. Small Cap Equity ETF is a reasonable option for investors seeking to outperform the Style Box - Small Cap Blend segment of the market. However, there are other ETFs in the space which investors could consider.
iShares Russell 2000 ETF (IWM) tracks Russell 2000 Index and the iShares Core S&P Small-Cap ETF (IJR) tracks S&P SmallCap 600 Index. iShares Russell 2000 ETF has $68.35 billion in assets, iShares Core S&P Small-Cap ETF has $84.92 billion. IWM has an expense ratio of 0.19% and IJR changes 0.06%.
Investors looking for cheaper and lower-risk options should consider traditional market cap weighted ETFs that aim to match the returns of the Style Box - Small Cap Blend
Bottom Line
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 ReportsThis article originally published on Zacks Investment Research (zacks.com).
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