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An Award-Winning Debut For This Goldman ETF

December 23, 2015 9:54 am
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An Award-Winning Debut For This Goldman ETF

In a year in which over 200 new exchange traded products have debuted, finding the pick of the litter really is not difficult. As has been widely noted, Goldman Sachs Group Inc. (NYSE: GS) is responsible for several of this year's most successful new exchange traded funds.

That includes the Goldman Sachs ActiveBeta U.S. Large Cap Equity ETF (NYSE: GSLC). GSLC is Goldman's first ETF, having launched three months ago. All GSLC has done in those three months is pack on nearly $221 million in assets under management. There is another superlative for GSLC as well: It has been named one of the best new ETFs of the year by Morningstar.

"Selected from 261 ETFs launched as of December 3, 2015, the December issue of ETFInvestor article reviewed the "The Best and Worst New ETFs of 2015" and highlighted that the 'low fee and relatively modest factor bets make GSLC a potential low-risk, medium-reward (relative to a cap-weighted U.S. large-cap exposure) proposition,'" said Goldman Sachs Asset Management (GSAM) in a statement.

Related Link: What The New Year Could Bring For A New Dividend ETF

Part of GSLC's advantage is its low fees. Actually, GSLC's annual fee of 0.09 percent is downright scant when measured against other strategic beta offerings. The average expense ratio for ETFs in the Morningstar US ETF Large Blend Strategic Beta category is 0.38 percent per year and the average annual fee for funds in the Morningstar US ETF Large Blend Index group is 0.36 percent, according to Goldman.

GSLC tracks the Goldman Sachs ActiveBeta U.S. Large Cap Equity Index, which "seeks to capture common sources of active equity returns, including value (i.e., the security's price compared to market value), momentum (i.e., performance history), quality (i.e., profitability relative to total assets) and volatility (i.e., consistency of returns)," according to Goldman.

GSLC holds 440 stocks, obviously less than the S&P 500, and the Goldman ETF's sector weights differ from the benchmark U.S. index. For example, technology, consumer discretionary and healthcare stocks combine for over 53 percent of GSLC's weight. Financial services, the S&P 500's second-largest sector weight, is GSLC's fourth-largest sector allocation.

GSLC's top 10 holdings, which combine for nearly 14 percent of the new ETF's weight, include seven members of the Dow Jones Industrial Average. The outliers are Wells Fargo & Co. (NYSE: WFC), Amazon.com, Inc. (NASDAQ: AMZN) and Gilead Sciences, Inc. (NASDAQ: GILD). Apple Inc. (NASDAQ: AAPL) is GSLC's largest holding at a weight of 2.9 percent.

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