Analyst Report
The Goldman Sachs ActiveBeta U.S. Large Cap Equity ETF (GSLC) is Goldman’s contribution to the crowded universe of large-cap equity ETFs. GSLC tracks a proprietary index that takes a multi-factor approach, looking for stocks that exhibit good value, strong momentum, high quality, and low volatility.
GSLC’s 2015 debut made a splash by charging an ultra-low management fee. At just 9 basis points, it was significantly cheaper than the smart-beta competition, and exactly the same price as the plain-vanilla SPDR S&P 500 ETF Trust (SPY), the first and largest ETF on the market. It was a cheeky publicity move — and it worked. GSLC quickly picked up considerable assets, a notable success for a late-mover. Other multi-factor funds come with a higher price tag, which could be a turn-off for cost conscious investors. GSLC’s low management fee makes it contender for a core portfolio allocation to U.S. large-cap stocks.
Top holdings include Microsoft, Apple, Amazon, and Johnson & Johnson. Like most U.S. large-cap funds, the portfolio tilts toward tech stocks. Though past performance is no guarantee of future results, GSLC has had higher returns than plain-vanilla U.S. equity funds like SPY and the cheaper iShares S&P 500 ETF (IVV). Investors can also run comparisons against other multi-factor ETFs, like the Invesco S&P 500 High Dividend Low Volatility ETF (SPHD).
