How Goldman Sachs’ Quant Approach Looks to Unlock Active ETFs

The ETF landscape continues to grow in leaps and bounds, with active ETFs playing an increasingly bigger role. Goldman Sachs is helping drive this evolution by leveraging its deep research and quantitative capabilities to innovate within the space. Leaders from Goldman Sachs Asset Management recently joined a VettaFi webinar to showcase this approach with their new ETF, the Goldman Sachs Data Enhanced International Equity ETF (GIEQ).Key Takeaways: The ETF space continues to balloon after a record-setting 2025, with U.S. ETFs reaching almost $14 trillion in AUM. Active ETFs continue to produce outsized gains, driving 38% of YTD flows despite representing only 13% of total assets. Goldman Sachs’ data-enhanced strategy demonstrates how quantitative tools can maximize the potential of active ETFs. The webinar, “Rethinking Active and Passive Investing with Data-Enhanced ETFs,” was hosted by VettaFi Head of Research Todd Rosenbluth and TMX/VettaFi Research Analyst Ben Hernandez. They were joined by Goldman Sachs Asset Management ETF Investment Strategist Elias Vanik and Lead Client Portfolio Manager of Quantitative Investment Strategies, Sarah Rich. The GSAM duo positioned GIEQ and the firm’s quant approach amid the broader rise for the ETF wrapper. Vanik explained that ETFs have evolved from a “low-cost, passive access vehicle” to a broad solution delivering transparency, exposure, and precision. ETFs, he said, have benefitted from global expansion, the rise of active, and strong launches and flows with little sign of slowing. The U.S.-listed ETF market has quadrupled in size in the last decade, Vanik said, with 2025 seeing ETF AUM in the U.S. set a record at almost $14 trillion. “The important point is that ETFs have moved from being a useful portfolio tool to becoming a more foundational part of portfolio construction,” he said. “Early on, ETFs were often used primarily for broad market access…today, the toolkit is so much deeper.”How Active ETFs Have Driven ETF GrowthThis year has already seen strong flows and momentum for the ETF market continue. For the first half of 2026,  flows outpaced first half flows in 2025 by 80%, Vanik continued. What’s more, he added, while active ETFs represent only 13% of total assets, they account for 38% of flows and almost 90% of launches. “Asset managers are responding to investor demand for more flexible, differentiated, and outcome-oriented strategies within the ETF wrapper,” Vanik said. “If active ETFs represent 38% of 2026 flows while holding only 13% of total assets, it really says that investors are allocating to active ETFs at a rate that exceeds their current share of the market.” See more: Value ETF GVUS Tracking for Major Milestone This Fall So, what does GSAM make of that landscape, and how has it looked to set itself apart as active ETFs grow? Rich discussed how the firm’s Quantitative Investment Strategies (QIS) team looks to find a middle ground between active and passive, while taking advantage of the trends that Vanik identified. She explained that GSAM’s QIS team looks to leverage the firm’s reams of data, with “15 years of experience in AI techniques” to gather and analyze market insights. By leveraging those capabilities, the firm can form investment views on more than 15,000 stocks every day, she said. “(That) means we’re guided by hundreds of proprietary drivers of return…This is really driving our stock selection,” Rich said. “Investing systematically, we can take this large number of small bets. And what that helps us do is it reduces our overall underperformance risk while still exposing us to diversified sources of potential outperformance.”QIS and Goldman Sachs' Quant InvestingRich also discussed her team’s approach to the Goldman Sachs Data Enhanced International Equity ETF (GIEQ). She said that while GIEQ maintains a broad market perspective, the fund intentionally takes steps to control risk and exposure. The portfolio managers keep tracking error limited and emphasise intentionality with their stock selection. This helps to prevent “style drifts” and keeps the fund aligned with its initial target areas.  RIch said that the QIS team currently evaluates over 300 different “dimensions of companies” compared to fewer than 15 in 1989. The organization uses all kind of data sources and tools, like AI, to help guide investment decisions. Combining fundamental and quant approaches, too, can produce better results, Rich said. “It’s really, really important, by the way, that we take that fundamental approach but we really blast it out at scale. We’re able to look across thousands of companies, across long time horizons,” Rich said. “That is really the advantage of that quantitative approach, even when it comes to traditional data.” GIEQ charges a 30 basis point fee for its quantitative strategy. The fund, which just launched in May, could represent the cutting edge in active ETF innovation and quantitative investing. For those who want to get exposure to the latest and greatest in the active space, GIEQ could be one to watch.  For more news, information, and strategy, visit the Future ETFs Content Hub.