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This Goldman ETF Keeps Growing

April 26, 2017 8:31 am
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This Goldman ETF Keeps Growing

There is always hope for new issuers of exchange-traded funds, but it also helps to have some brand power if a company is going to be late to the ETF revolution. Goldman Sachs Group Inc (NYSE:GS) proves as much.

New York-based Goldman launched the first of its ActiveBeta smart beta ETFs in late 2015 and some members of that group have proven remarkably successful. That includes the Goldman Sachs ActiveBeta U.S. Large Cap Equity ETF (NYSE:GSLC), which can be used as an alternative to traditional, cap-weighted U.S. large-cap equity exposure.

GSLC Getting Its Groove On

GSLC was one of the most successful ETFs to come to market in 2015, due in large part to substantial capital commitments from institutional investors prior to launch. To its credit, GSLC has continued growing and is doing so in noticeable fashion.

GSLC “has caught some attention lately in the marketplace with several large block volume trading days in the middle of April, and the fund itself is trading at new all-time product highs today on another broad-based equity rally,” said Street One Financial Vice Paul Weisbruch in a note out Tuesday.

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.

Success On The Street

Investors recently found affinity for mulifactor ETFs, those funds that emphasize multiple investment factors, is also boosting GSLC.

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 had $1.82 billion in assets under management as of April 24. The ETF allocates 21.5 percent of its weight to technology stocks and 14.5 percent to the consumer discretionary sector. Over the past year, GSLC is trailing the S&P 500 by 220 basis points, but the Goldman ETF has been slightly less volatile.

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