With financial advisors attempting to find the happy medium between cost-efficient passive exchange-traded funds and expensive actively-managed mutual funds, global investment management firm Goldman Sachs fills that void with its Goldman Sachs ActiveBeta US LgCp Eq ETF (NYSEArca: GSLC).
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The focus of GSLC is to seek investment results that closely correspond to the performance of the Goldman Sachs ActiveBeta® U.S. Large Cap Equity Index. In order to achieve this, 80 percent of its assets are held in securities within the underlying index.
With an expense ratio of 0.09 percent, it is about five times cheaper than the average ETF and 10 times cheaper than the average mutual fund. Rather than rely heavily on active managers, GSLC helps curb the costs by using a multi-factor investing strategy that leans on four factors–value, momentum, quality and low volatility.
This combination of a low expense ratio and multi-factor strategies has made it a cost-efficient performer. Year-to-date performance shows a 2.93 percent return and 15.58 percent within the past year.
GSLC represents a growing ETF product base aimed at eliminating the human factor in active-management investing. According to Eric Balchunas of Bloomberg, GSLC is “the ETF equivalent of the T-1000 Terminator, a killer cyborg fund sent from the future perfectly calibrated to eliminate human managers by exploiting the growing world of fee-based advisers.”
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