Is the Goldman Sachs Active Beta World Low Vol Plus Equity

What are smart beta ETFs?

The ETF industry has traditionally been dominated by products based on market capitalization-weighted indices, which are designed to represent a market or a specific segment of the market.

Because market-capitalization-weighted indices provide a low-cost, convenient, and transparent way to replicate market returns, they are suitable for investors who believe in market efficiency.

However, some investors prefer to invest in smart beta funds; These funds track non-capitalization-weighted strategies and are a strong option for those who prefer to select the best stocks to outperform the market.

These indices attempt to select stocks with superior risk-reward performance based on certain fundamental characteristics or a combination of such characteristics.

The smart beta space offers investors several different options, ranging from equal-weighting, one of the simplest strategies, to more complex strategies, such as fundamental and volatility/momentum-based weighting. However, not all of these methods have been able to deliver significant returns.

Fund Sponsor and Index

This fund is managed by Goldman Sachs Funds. GLOV has accumulated assets of over $1.48 billion, making it one of the largest global large-cap blend equity ETFs. This particular fund attempts to match the performance of Goldman Sachs ACTBT WORLD LW VL PL EQ ID, before fees and expenses.

The Goldman Sachs ActiveBeta World Low Vol Plus Equity Index provides exposure to large- and mid-capitalization equity securities of developed market issuers, including those in the United States.

Costs and Other Expenses

Since cheaper funds tend to deliver better results than more expensive funds, assuming all other factors remain equal, it is important for investors to pay attention to an ETF's expense ratio.

One of the cheapest products in this sector, this ETF has annual operating expenses of 0.25%.

Its trailing 12-month dividend yield is 1.76%.

Sector Investments and Top Holdings

Most ETFs are very transparent products and disclose their holdings daily. ETFs also offer diversified investments, reducing single-stock risk, although it is still important for investors to research the fund's holdings.

Considering individual holdings, Apple Inc. (AAPL) accounts for approximately 3.63% of the fund's total assets, followed by Microsoft Corporation (MSFT) and Nvidia Corporation (NVDA).