Goldman Sachs ActBt Wld Lw Vl Ps Eq ETF’s management team is rated Average, but a solid investment process still helps this strategy retain its Morningstar Medalist Rating of Silver. The portfolio maintains a sizable cost advantage over competitors, priced within the least expensive fee quintile among peers.  

 The strategy's sensible investment philosophy merits an Above Average Process Pillar rating. Independent of the rating, analysis of the strategy's portfolio shows it has maintained a significant underweight position in quality exposure and volatility exposure compared with category peers. Low quality exposure is attributed to stocks with higher financial leverage and lower profitability. And low volatility exposure is rooted in stocks that have a lower standard deviation of returns. The strategy’s management team earns an Average People Pillar rating. The strategy's parent organization earns the firm an Average Parent Pillar rating. People Pillar and Parent Pillar ratings for this strategy are indirectly assigned by a Morningstar analyst rather than algorithmically derived. Please see the notes following each pillar section for more details. The details of assigning methods can be found in each pillar section.

Analyst Rating

Microsoft

Apple

Amazon

O'Reilly Automotive

Berkshire Hathaway Inc. - Ordinary Shares - Class B

NVIDIA

Walmart

Dell Technologies

Morningstar's evaluation of this security's process aims to determine the likelihood that it will outperform its Morningstar Category benchmark on a risk-adjusted basis over the long term. Goldman Sachs ActBt Wld Lw Vl Ps Eq ETF earns an Above Average Process Pillar rating. 

The main driver of the rating is that this fund tracks an index. Historical data, like Morningstar's Active/Passive Barometer, finds that passively managed funds have generally outperformed their active counterparts, especially over longer time horizons. Low costs across its parent firm's funds, whose fees, on average, rank in the middle quintile of their respective category, also support the process. The pattern of low costs at the firm indicates that it is focused on delivering strong results for investors. Lastly, the process is limited by the small size of its portfolio management team of one.

 This strategy leans toward smaller, more undervalued companies than its average peer in the Global Large-Stock Blend Morningstar Category. Analyzing additional factors, this strategy has consistently favored low-quality stocks compared with Morningstar Category peers over the past few years. Lacking this ballast, the fund's prospects could rest on its ability to surpass peers during economic booms. In the latest month, the strategy was also less exposed to the Quality factor compared with Morningstar Category peers. This strategy has also tilted toward low-volatility stocks in recent years, meaning those that have a lower standard deviation of returns. These low-risk stocks are typically at their best when markets are not. Low volatility exposure contributes to limited loss on the downside at the cost of a lag in bull markets. Similarly, in recent months, the strategy also had less exposure to the Volatility factor than peers. Additionally, this strategy's portfolio has held more stocks with high dividend or buyback yields than peers over recent years. Higher-yield stocks can provide steady income, but also have their risks. Dividend payers may cut payouts, for instance, if their earnings fall. In this month, the strategy also had more exposure to the Yield factor over its peers. More information on a fund and its respective category's factor exposure can be found in the Factor Profile module within the Portfolio section. 

 The portfolio is overweight in consumer defensive and financial services relative to the category average by 4.7 and 2.6 percentage points, respectively. The sectors with low exposure compared to category peers are energy and basic materials, underweight the average by 4.0 and 3.0 percentage points of assets, respectively. The strategy owns 372 securities and its assets are more dispersed than the typical peer in the category. In the most recent disclosure, 14.1% of the portfolio's assets were concentrated in the top 10 fund holdings, compared to the category’s 25.2% average. And finally, in terms of portfolio turnover, looking at year-over-year movements, 31% of the fund's holdings have turned over, whether through increasing, decreasing, or changing a position.

Above Average

Process

Goldman Sachs’s team is valuable but does not stand out as one of the industry's best, warranting an Average People Pillar rating. The fund takes a solo manager approach, with Raj Garigipati as the only listed manager at the helm, who brings eight years of portfolio management experience to the table. They manage a total of 20 strategies, with solid long-term prospects. The strategies average a Bronze asset-weighted Morningstar Medalist Rating, indicating a position to deliver positive alpha relative to the category median in aggregate. With only one manager listed on the strategy, the passive strategy is vulnerable to key-person risk. 

 Note: This People Pillar rating is indirectly assigned by an analyst. Morningstar analysts evaluate the People Pillar for passive products at the brand level and may also differentiate by asset class. There is at least one other passive strategy at the firm that is covered by a Morningstar analyst, so the People Pillar rating of the fund is inherited from the rating that the Morningstar analyst assigned to investment vehicles under the same brand name.

Average

People

Goldman Sachs Asset Management heads into an uncertain direction on multiple fronts, underpinning its Average Parent rating.
GSAM has long struggled with personnel turnover, with a steady degree of analyst departures and additions coinciding with leadership reshufflings over the past few years that includes the September 2022 departure of equity head Katie Koch. Meanwhile, parent company Goldman Sachs elected to merge its asset management and wealth management units in October 2022, reversing a decision to split them in 2020, and assigned Marc Nachmann to lead the unit. Although he is a longtime Goldman veteran, most of his prior experience has been with the firm’s investment bank. Potentially complicating his remit is the firm’s December 2021 acquisition of NN IP, whose traditional and sustainable-investing branches could add capabilities but will take time to integrate. Bolstering the firm’s sustainability credentials could be especially pressing given the SEC’s November 2022 fining of GSAM for past failings in its ESG-related operations. 
GSAM has some strengths worth highlighting. Portfolio-manager ownership statistics across the firm’s U.S. lineup have improved dramatically since the firm instituted a deferred compensation program of fund shares in early 2020, and GSAM has compelling capabilities within its quantitative equity franchise.

Parent

Goldman Sachs Activebeta World Low Vol Plus Equity ETF

GLOV tracks an index that selects large- and mid-cap stocks in developed markets based on four factors: value, momentum, quality and an emphasis on low volatility. 

GLOV tracks a tier-weighted index that selects large- and mid-cap stocks in developed markets based on four factors: value, momentum, quality and an emphasis on low volatility.

Launched on 03/15/2022, the Goldman Sachs ActiveBeta World Low Vol Plus Equity ETF (GLOV) is a smart beta exchange traded fund offering broad exposure to the Broad Developed World ETFs category of the market.

News for Goldman Sachs Activebeta World Low Vol Plus Equity ETF ETF (GLOV)