The Goldman Sachs ActiveBeta U.S. Small Cap Equity ETF (GSSC) was launched on 06/28/2017, and is a smart beta exchange traded fund designed to offer 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.
Investors who believe in market efficiency should consider market cap indexes, as they replicate market returns in a low-cost, convenient, and transparent way.
On the other hand, some investors who believe that it is possible to beat the market by superior stock selection opt to invest in another class of funds that track non-cap weighted strategies--popularly known as smart beta.
These indexes attempt to select stocks that have better chances of risk-return performance, based on certain fundamental characteristics or a combination of such characteristics.
Methodologies like equal-weighting, one of the simplest options out there, fundamental weighting, and volatility/momentum based weighting are all choices offered to investors in this space, but not all of them can deliver superior returns.
Fund Sponsor & Index
GSSC is managed by Goldman Sachs Funds, and this fund has amassed over $887.67 million, which makes it one of the average sized ETFs in the Style Box - Small Cap Blend. Before fees and expenses, this particular fund 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
When considering an ETF's total return, expense ratios are an important factor. And, cheaper funds can significantly outperform their more expensive cousins in the long term if all other factors remain equal.
Operating expenses on an annual basis are 0.20% for this ETF, which makes it on par with most peer products in the space.
GSSC's 12-month trailing dividend yield is 1.13%.
Sector Exposure and Top Holdings
While ETFs offer diversified exposure, which minimizes single stock risk, a deep look into a fund's holdings is a valuable exercise. And, most ETFs are very transparent products that disclose their holdings on a daily basis.
For GSSC, it has heaviest allocation in the Industrials sector --about 18.9% of the portfolio --while Financials and Healthcare round out the top three.
Looking at individual holdings, Cmrc/cme Eminirus2k 3/2026 (RTYH6) accounts for about 0.69% of total assets, followed by Bloom Energy Corp (BE) and Compass Inc. (COMP).
Its top 10 holdings account for approximately 3.92% of GSSC's total assets under management.
Performance and Risk
So far this year, GSSC return is roughly 4.19%, and is up about 19.03% in the last one year (as of 03/02/2026). During this past 52-week period, the fund has traded between $55.86 and $81.24.
GSSC has a beta of 1.04 and standard deviation of 20.25% for the trailing three-year period. With about 1336 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 $73.53 billion in assets, iShares Core S&P Small-Cap ETF has $95.53 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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