Daily ETF Watch: Goldman Sachs’ 1st Launch

September 21, 2015

The ETF market is today welcoming yet another major asset manager into the fold. Goldman Sachs Asset Management is launching its first ETF—a smart-beta fund built around a proprietary index designed to seek outperformance relative to the market.

GSAM is Goldman Sachs’ asset management unit overseeing more than $1 trillion in assets. Up until now, Goldman Sachs’ name only appeared in ETF circles as the issuer behind two small ETNs, the $125 million GS Connect S&P GSCI Enhanced Commodity Total Return Strategy ETN (GSC | F-89) and the $7 million Claymore CEF-Linked GS Connect ETN (GCE).

Now the firm is making a major push into the ETF space with the launch of the ActiveBeta U.S. Large Cap Equity ETF (GSLC)—the first of many more to come. According to the company, the decision to bring ETFs to market was a response to growing client demand for Goldman Sachs’ expertise delivered in ETF wrappers, according to GSAM.

"Our approach to ETFs continues our legacy of investment innovation and at a cost that makes them accessible to all investors," said Tim O'Neill, global co-head of the Investment Management division, which includes GSAM, in a press release.

GSLC tracks a proprietary index that weights stocks based on four factors: value, momentum, quality—companies that have “sustainable profitability”—and low volatility. The prospectus for the fund also details five other similar strategies, each focused on U.S. small-cap, Japan, Europe, emerging markets and international equities.

GSLC is coming to market with a seed of $50 million in institutional assets, and a price tag of only 9 basis points in expense ratio, or $9 per $10,000 invested.

Contact Cinthia Murphy at [email protected].

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