Designed to provide broad exposure to the Style Box - Small Cap Blend category of the market, the Goldman Sachs ActiveBeta U.S. Small Cap Equity ETF (GSSC) is a smart beta exchange traded fund launched on 06/28/2017.
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.
If you're the kind of investor who would rather try and beat the market through good stock selection, then smart beta funds are your best choice; this fund class is known for tracking non-cap weighted strategies.
By attempting to pick stocks that have a better chance of risk-return performance, non-cap weighted indexes are based on certain fundamental characteristics, or a combination of such.
Even though this space provides many choices to investors--think one of the simplest methodologies like equal-weighting and more complicated ones like fundamental and volatility/momentum based weighting--not all have been able to deliver first-rate results.
Fund Sponsor & Index
Because the fund has amassed over $1.05 billion, this makes it one of the average sized ETFs in the Style Box - Small Cap Blend. GSSC is managed by Goldman Sachs Funds. Before fees and expenses, GSSC 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 GSSC, making it on par with most peer products in the space.
It's 12-month trailing dividend yield comes in at 1.03%.
Sector Exposure and Top Holdings
It is important to delve into an ETF's holdings before investing despite the many upsides to these kinds of funds like diversified exposure, which minimizes single stock risk. And, most ETFs are very transparent products that disclose their holdings on a daily basis.
Representing 18.9% of the portfolio, the fund has heaviest allocation to the Industrials sector; Financials and Healthcare round out the top three.
When you look at individual holdings, Cmrc/cme Eminirus2k 6/2026 (RTYM6) accounts for about 1.46% of the fund's total assets, followed by Bloom Energy Corp (BE) and Sterling Infrastructure Inc (STRL).
GSSC's top 10 holdings account for about 6.5% of its total assets under management.
Performance and Risk
The ETF has gained about 20.52% and was up about 32.58% so far this year and in the past one year (as of 07/17/2026), respectively. GSSC has traded between $67.52 and $91.26 during this last 52-week period.
The fund has a beta of 1.04 and standard deviation of 19.99% for the trailing three-year period. With about 1322 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 $82.79 billion in assets, iShares Core S&P Small-Cap ETF has $110.43 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
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Goldman Sachs ActiveBeta U.S. Small Cap Equity ETF (GSSC): ETF Research Reports
This article originally published on Zacks Investment Research (zacks.com).