Goldman Sachs Small Cap Equity ETF

GSC

Market cap $165M

The Goldman Sachs Small Cap Equity ETF (GSC) returned 5.57% (based on NAV, net of fees) during the quarter, underperforming its benchmark – the Russell 2000 Index – by 682 basis points (bps). In the quarter, stock selection in Real Estate and our overweight position in Industrials contributed the most to relative returns, while stock selection in Information Technology and Health Care were most challenged. We initiated a position in Enpro Inc. (Buy), a company that designs, develops, manufactures, and markets proprietary engineered industrial products, during the quarter.

Increasing interest in active management has been a persistent trend in 2025. Still, the current momentum should continue to drive demand in 2026.

Goldman Sachs Small Cap Core Equity ETF is an actively managed small-cap ETF with $120 million AUM, aiming to outperform traditional passive small-cap indices like the iShares Russell 2000 ETF through selective stock picking. The fund is overweight in industrials, financials, and information technology compared to IWM, but underweight in health care, indicating a distinct approach to sector exposure. Small caps are particularly sensitive to high front-end rates due to their reliance on floating-rate debt, which has dampened performance despite potential additional Fed rate cuts.

This year's Exchange conference in Miami brought together asset managers, advisors, and more industry leaders to talk ETFs. Perhaps no investing theme permeated the discussion as much as what to do about market concentration risk.

Actively managed equity ETFs are gaining traction in 2024. Despite representing 5% of assets, they have pulled in more than 25% of the net inflows this year as of late March.

Most exchange-traded funds are passively managed — they are designed to mirror the performance of stock indexes and typically have low management fees. They can work out very well for investors, which has been the case for funds that track the S&P 500.

Goldman Sachs Asset Management has listed two new equity ETFs on the New York Stock Exchange. The Goldman Sachs MarketBeta Russell 1000 Growth Equity ETF (NYSE Arca: GGUS) targets large- and midcap U.S. growth stocks.