Smart-Beta ETF No. 9: Goldman Sachs ActiveBeta Large Cap ETF (GSLC)
AUM: $741 Million
Inception Date: 9/21/15
Why: Introduced The Smart Beta World To The Concept of Price War
The newest ETF on the list, the Goldman Sachs ActiveBeta Large Cap ETF (GSLC), is important for a variety of reasons. For starters, its success—pulling in $736 million in its first 10 months on the market—proved once again that newcomers to the ETF space could pull down significant assets if they put the right brand, distribution network and product strategy in place. Secondly, it heralded the launch of another blue-chip Wall Street firm into the ETF space. But most importantly, and the reason for its place on this list, was that it priced at an expense ratio of 0.09%.
Expense ratios in ETFs have been under pressure since 1993, and the smart-beta space has not been immune. But GSLC took things to an entirely different level by pricing itself competitively with the cheapest ETFs in the world. Indeed, GSLC is priced exactly the same as the S&P 500 SPDRs (SPY|A-97), challenging people with the question: Do you want basic large-cap exposure or do you want exposure managed by some of the smartest people on Wall Street?
It’s an important question that’s resonated throughout the smart-beta space.
Wide Variety Of Important Funds
Any list is going to omit a variety of equally deserving funds: multifactor ETFs from State Street Global Advisors, funds like the FlexShares Credit-Scored US Corporate Bond Index Fund (SKOR | B) that have opened up smart beta in the fixed-income space, and products like the VanEck Vectors Morningstar Wide Moat ETF (MOAT | A-63) that have broadened the definition of what smart beta is, all deserve nods.
Perhaps the most defining feature of the smart-beta boom is the heterogeneity. Smart beta can mean many different things to many different people. And that’s probably the most definitive thing about this list: When we look back on this list in 10 years, there will be many more funds and many more assets between them.
At the time of writing, the author owned none of the ETFs mentioned. Matt Hougan is the CEO of InsideETFs and can be reached at [email protected].