Goldman Sachs ActiveBeta® Emerging Markets Equity ETF (GEM)

Overview

The Goldman Sachs ActiveBetau00ae Emerging Markets Equity ETF (GEM) seeks to provide investment results that closely correspond, before fees and expenses, to the performance of the Goldman Sachs ActiveBetau00ae Emerging Markets Equity Index. The fund uses a rules-based approach to select and weight stocks from emerging market countries, aiming to outperform traditional market-cap-weighted indices.

Reputation and Reliability

Goldman Sachs is a well-established and reputable financial institution with significant experience in asset management.

Management Expertise

Goldman Sachs Asset Management has a deep bench of investment professionals with expertise in quantitative and active investment strategies.

Goal

To provide investment results that closely correspond, before fees and expenses, to the performance of the Goldman Sachs ActiveBetau00ae Emerging Markets Equity Index.

Investment Approach and Strategy

Strategy: The ETF does not passively track a market-cap-weighted index. Instead, it uses a rules-based, multi-factor active beta approach to select and weight holdings, aiming for superior risk-adjusted returns. Factors include value, momentum, quality, and low volatility.

Composition The ETF primarily holds stocks of companies located in emerging market countries. Portfolio composition is determined by the rules-based index methodology.

Market Share: GEM has a moderate market share within the emerging markets equity ETF segment.

Total Net Assets (AUM): 2243000000

Key Competitors

• Vanguard FTSE Emerging Markets ETF (VWO)
• iShares Core MSCI Emerging Markets ETF (IEMG)
• Schwab Emerging Markets Equity ETF (SCHE)

Competitive Landscape

The emerging markets equity ETF market is highly competitive. GEM faces competition from large, established ETFs like VWO and IEMG, which have lower expense ratios and greater AUM. GEM's advantage lies in its active beta strategy, which seeks to outperform market-cap-weighted indices, but this also introduces tracking error risk. GEM's higher expense ratio may be a disadvantage compared to its passive competitors.

Historical Performance: Historical performance data is available from the ETF's fact sheet and other financial websites and should be considered alongside risk factors.

Benchmark Comparison: The ETF's performance should be compared to the Goldman Sachs ActiveBetau00ae Emerging Markets Equity Index to assess the effectiveness of its active beta strategy.

Expense Ratio: 0.45

Average Trading Volume

The ETF exhibits moderate liquidity with a respectable average trading volume, facilitating relatively easy buying and selling of shares.

Bid-Ask Spread

The bid-ask spread is typically tight, indicating low transaction costs for investors.

Market Environment Factors

Economic growth in emerging markets, geopolitical risks, currency fluctuations, and commodity prices all impact GEM's performance.

Growth Trajectory

The growth trajectory of GEM depends on the performance of its active beta strategy and the overall attractiveness of emerging market equities. There may be periodic adjustments to strategy and holdings.

Competitive Edge

GEM's competitive edge stems from its ActiveBetau00ae strategy, utilizing a multi-factor model (value, momentum, quality, and low volatility) for stock selection, differentiating itself from passive market-cap-weighted ETFs. This approach offers the potential for higher risk-adjusted returns, appealing to investors seeking alpha within the emerging markets. Goldman Sachs' brand and expertise add credibility, while the rules-based methodology provides transparency and consistency. However, outperformance is not guaranteed, and the active strategy leads to a slightly higher expense ratio.

Volatility

GEM's volatility is generally similar to other emerging markets equity ETFs, reflecting the inherent volatility of emerging markets.

Market Risk

GEM is subject to market risk associated with emerging market equities, including economic, political, and currency risks specific to those countries.

Ideal Investor Profile

The ideal investor for GEM is someone seeking exposure to emerging markets equities with the potential for outperformance relative to traditional market-cap-weighted indices, and who is comfortable with a slightly higher expense ratio.

Market Risk

GEM is suitable for long-term investors with a moderate to high risk tolerance seeking capital appreciation from emerging markets.

Goldman Sachs ActiveBetau00ae Emerging Markets Equity ETF offers access to emerging market equities with a rules-based, multi-factor active beta approach that seeks to outperform traditional market-cap-weighted indices. Its ActiveBetau00ae strategy, while offering potential alpha, comes with a slightly higher expense ratio than its passive competitors. The ETF is suitable for investors with a long-term horizon and a moderate risk tolerance seeking exposure to emerging markets with potential for enhanced returns. Investors should consider factors such as emerging market volatility, currency fluctuations, and expense ratios when evaluating GEM.

Data Sources:

• Goldman Sachs Asset Management Website
• ETF.com
• Morningstar
• Bloomberg

Disclaimers:

The data provided is for informational purposes only and should not be considered investment advice. Past performance is not indicative of future results. Market conditions and risks can change.