Daily ETF Watch: Goldman Plans Smart Beta

December 15, 2014

Goldman Sachs has filed regulatory paperwork detailing plans to market a number of “smart beta” exchange-traded funds, making it the latest major financial institution to enter the ETF space. The firm outlined plans for 11 funds in a filing dated Dec. 12, 2014.

Major firms such as The Capital Group (American Funds), Eaton Vance, USAA, Wells Fargo and T. Rowe Price have all filed 40-APP forms with the Securities and Exchange Commission indicating their intention to launch ETFs. Other large players like Franklin Templeton, J.P. Morgan and John Hancock have already launched their initial funds.

The funds in the Goldman filing are a mix of hedge-fund—carrying the “Hedge Fund Tracker” name—and smart-beta strategies to be marketed under the ActiveBeta name.

The six “ActiveBeta” ETFs include the following:

  • Goldman Sachs ActiveBeta International Equity ETF
  • Goldman Sachs ActiveBeta Emerging Markets Equity ETF
  • Goldman Sachs ActiveBeta Europe Equity ETF
  • Goldman Sachs ActiveBeta Japan Equity ETF
  • Goldman Sachs ActiveBeta U.S. Large Cap Equity ETF
  • Goldman Sachs ActiveBeta U.S. Small Cap Equity ETF

The filing didn’t include many details about the indexes, but indicated they were in-house and sought to diversify among four different factors.

The five “Hedge Fund Tracker” ETFs include the following:

  • Goldman Sachs Equity Long Short Hedge Fund Tracker ETF
  • Goldman Sachs Event Driven Hedge Fund Tracker ETF
  • Goldman Sachs Macro Hedge Fund Tracker ETF
  • Goldman Sachs Multi-Strategy Hedge Fund Tracker ETF
  • Goldman Sachs Relative Value Hedge Fund Tracker ETF

The funds will seek to capture the returns of hedge funds employing their respective strategies via their underlying indexes. The index’s components can include exchange-traded vehicles, among other securities, and use inverse ETFs to achieve short exposure, according to the prospectus.

All 11 funds are slated to list on the NYSE Arca exchange; however, the filing did not include tickers or expense ratios.

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