This Strategic Beta ETF Ticks a Lot of Boxes
With a low 0.09% fee, Goldman Sachs ActiveBeta U.S. Large Cap Equity ETF looks to exploit time-tested factors in a fairly simple, highly transparent manner.
This Strategic Beta ETF Ticks a Lot of Boxes
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Ben Johnson: Goldman Sachs ActiveBeta U.S. Large Cap Equity ETF caught our attention when it was launched in September 2015 for a variety of reasons, but the first was its low fee. At 0.09% the fund’s expense ratio is the lowest in the fast-growing field of multifactor strategic-beta ETFs by a wide margin.
While a low fee is a great start, the fund's benchmark index also ticks a lot of important boxes. It looks to exploit time-tested factors in a manner that is both fairly simple and highly transparent.
The fund's index is made up of four subportfolios that set out to harness value, momentum, quality, and low volatility. Each subportfolio will either over- or underweight stocks based on the strength of their factor traits. The index then equally weights these four factor portfolios.
Because the fund allocates a quarter of its portfolio to each of these factor sleeves, the magnitude of these factor bets will be modest in aggregate.
A low fee and modest, sensibly constructed and simply combined bets on vetted factors make GSLC a potential low-risk, medium-reward proposition relative to an index fund or ETF offering broad, market cap-weighted exposure to U.S. large-cap stocks.