Goldman Sachs ActiveBeta International Equity ETF Underperforms Popular Alternatives with Similar Returns.

Goldman Sachs ActiveBeta International Equity ETF (GSIE) has returns similar to other international ETFs like EFA and VEA, despite its factor-based methodology. As a result, GSIE has a lower AUM (~4b) and lower following.

The Goldman Sachs ActiveBeta International Equity ETF (GSIE) has garnered attention for its factor-based methodology, which aims to deliver returns similar to traditional international ETFs like the iShares MSCI EAFE ETF (EFA) and the Vanguard FTSE Developed Markets ETF (VEA). Despite its innovative approach, GSIE has a relatively low asset under management (AUM) of approximately $4 billion, compared to the broader market, and has seen lower following among investors.

According to Seeking Alpha [1], GSIE's performance aligns closely with that of EFA and VEA, indicating that its factor-based methodology effectively captures the returns of these more popular international alternatives. This similarity in performance is notable given the unique approach GSIE takes, which focuses on factor-based investing.

The lower AUM and following for GSIE can be attributed to several factors. One key factor is the relatively new introduction of factor-based ETFs, which have not yet gained widespread acceptance and understanding among investors. Additionally, the perception of higher fees associated with actively managed funds may deter some investors from choosing GSIE, despite its competitive expense ratio of 29 basis points.

However, the recent performance of GSIE is encouraging. The fund has shown the ability to generate returns that are on par with its benchmark, the MSCI EAFE Index, while offering a more diversified and potentially less volatile investment experience. This is particularly relevant in the current market environment, where investors are seeking alternative strategies to traditional passive investing.

Moreover, the broader trends in the ETF market support the potential for GSIE. According to STOXX [2], inflows into European stocks, including those tracked by the STOXX and DAX indices, have jumped significantly in the first half of 2025. This increased interest in European equities may provide a tailwind for GSIE, as investors continue to seek exposure to the region.

In conclusion, while GSIE has faced challenges in terms of AUM and following, its performance and methodology offer a compelling alternative to traditional international ETFs. As investors become more familiar with factor-based investing and the benefits it can provide, GSIE may see an increase in adoption and growth.

References:
[1] https://seekingalpha.com/article/4801206-gsie-smart-beta-average-returns
[2] https://stoxx.com/stoxx-and-dax-linked-etf-assets-flows-jump-in-h1-outperforming-industry/