A Look at Goldman's Flagship ETF

The Goldman Sachs ActiveBeta U.S. Large Cap Equity ETF (NYSEarca: GSLC) was one of the first exchange traded funds introduced by Goldman Sachs. GSLC, which turns three in September, has been a hit with investors in less than three years of trading as highlighted by $2.84 billion in assets under management.

As a multi-factor ETF, part of GSLC’s objective is to provide investors with a broad basket of equities with the potential to top traditional benchmarks, such as the S&P 500, while removing the need to time individual investment factors.

GSLC factors include value or how attractively a stock is price relative to fundamentals like book value and free cash flow; momentum or the current up or down trend in a company stock; quality or profitability; and low volatility or the degree of fluctuation in a company’s share price over time.

“The portfolio is divided into four equally weighted sleeves that each tilt toward stocks with a different characteristic of interest,” said Morningstar. “This simple approach is transparent, though a more integrated approach would probably be a bit more efficient. Each sleeve gives over- or underweightings to stocks from the large-cap selection universe based on the degree to which they exhibit the targeted style characteristic.”

GSLC holds 440 stocks. Apple Inc. (NASDAQ:AAPL) is the ETF’s largest holding at a weight of 3.1%. Technology is GSLC’s largest sector weight at 25.5% followed by healthcare at 14.5%. The consumer discretionary and financial services sectors combine for almost 27% of GSLC’s roster.