Today Goldman Sachs launched its third fixed-income ETF. The Goldman Sachs Access High Yield Corporate Bond ETF (GHYB) tracks an index from Citigroup that Goldman helped develop.
The fund comes with an expense ratio of 0.34% and lists on the NYSE Arca.
GHYB tracks the Citi Goldman Sachs High Yield Corporate Bond Index, which is based on the Citi U.S. High-Yield Market Index. It covers high-yield corporate bonds denominated in U.S. dollars, and as of the start of September, the fund’s benchmark had 661 components and a weighted average maturity of 5.8 years.
First, the methodology screens the parent index to select the securities with at least $400 million outstanding, an issuer size of at least $1 billion, a final maturity of no more than 15 years and a rating of at least CCC+ by Standard & Poor’s or Caa1 by Moody’s, the prospectus said.
In the second step, the securities are sorted into the three traditional bond industry groups: financials, industrials and utilities. From there, they are ranked by a 50-50 combination of two fundamental factors—debt service and leverage—with the highest-ranked securities selected for inclusion, according to the prospectus.
The fund joins two other Goldman Sachs fixed-income ETFs. The Goldman Sachs TreasuryAccess 0-1 Year ETF (GBIL) has $815 million in assets under management, while the Goldman Sachs Access Investment Grade Corporate Bond ETF (GIGB), which also relies on fundamental characteristics in its construction, has $180 million.
At 34 basis points, GHYB is cheaper than the largest competitors in the space. The $18 billion iShares iBoxx $ High Yield Corporate Bond ETF (HYG) charges 0.49%, while the $12.6 billion SPDR Bloomberg Barclays High Yield Bond ETF (JNK) charges 0.40%.
Contact Heather Bell at [email protected]