The Goldman Sachs ActiveBeta World Low Vol Plus Equity ETF (GLOV) was launched on 03/15/2022, and is a smart beta exchange traded fund designed to offer broad exposure to the Broad Developed World ETFs category of the market.
What Are Smart Beta ETFs?
Market cap weighted indexes were created to reflect the market, or a specific segment of the market, and the ETF industry has traditionally been dominated by products based on this strategy.
Market cap weighted indexes offer a low-cost, convenient, and transparent way of replicating market returns, and are a good option for investors who believe in market efficiency.
However, some investors believe in the possibility of beating the market through exceptional stock selection, and choose a different type of fund that tracks non-cap weighted strategies: smart beta.
These indexes attempt to select stocks that have better chances of risk-return performance, based on certain fundamental characteristics or a combination of such characteristics.
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 $587.52 million, this makes it one of the average sized ETFs in the Broad Developed World ETFs. GLOV is managed by Goldman Sachs Funds. Before fees and expenses, GLOV seeks to match the performance of the GOLDMAN SACHS ACTBT WORLD LW VL PL EQ ID.
The Goldman Sachs ActiveBeta World Low Vol Plus Equity Index delivers exposure to large and mid-capitalization equity securities of developed market issuers, including the United States.
Cost & Other Expenses
Investors should also pay attention to an ETF’s expense ratio. Lower cost products will produce better results than those with a higher cost, assuming all other metrics remain the same.
Operating expenses on an annual basis are 0.25% for GLOV, making it one of the cheaper products in the space.
It has a 12-month trailing dividend yield of 1.21%.
Sector Exposure and Top Holdings
While ETFs offer diversified exposure, which minimizes single stock risk, a deep look into a fund’s holdings is a valuable exercise. And, most ETFs are very transparent products that disclose their holdings on a daily basis.
Taking into account individual holdings, Apple Inc (AAPL) accounts for about 2.95% of the fund’s total assets, followed by Microsoft Corp (MSFT) and Oreilly Automotive Inc (ORLY).
GLOV’s top 10 holdings account for about 14.13% of its total assets under management.
Performance and Risk
The ETF has lost about -7.98% so far this year.
With about 389 holdings, it effectively diversifies company-specific risk.
Alternatives
Goldman Sachs ActiveBeta World Low Vol Plus Equity ETF is a reasonable option for investors seeking to outperform the Broad Developed World ETFs segment of the market. However, there are other ETFs in the space which investors could consider.
IShares MSCI ACWI ETF (ACWI) tracks MSCI All Country World Index and the Vanguard Total World Stock ETF (VT) tracks FTSE Global All Cap Index. IShares MSCI ACWI ETF has $17.64 billion in assets, Vanguard Total World Stock ETF has $23.49 billion. ACWI has an expense ratio of 0.32% and VT charges 0.07%.
Investors looking for cheaper and lower-risk options should consider traditional market cap weighted ETFs that aim to match the returns of the Broad Developed World ETFs.
Bottom Line
To learn more about this product and other ETFs, screen for products that match your investment objectives and read articles on latest developments in the ETF investing universe, please visit
Zacks ETF Center
.
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