Goldman Sachs launched the Goldman Sachs Future Planet Equity ETF (GSFP) today, combining sustainable investing, thematic investing and active management in one package. The fund is the first in a new suite of ETFs that are set to focus on disruptive themes.
GSFP has an expense ratio of 0.75% and trades on NYSE Arca.
Katie Koch, co-head of the Fundamental Equity business within Goldman Sachs Asset Management, says traditional benchmarks are backward-looking due to the nature of how they are constructed. This means these indices are traditionally lacking exposure to disruptive and innovative technologies, causing most clients to be underinvested in these ideas relative to the level of their importance in today’s world.
Koch says “we are on the cusp of a sustainability revolution that could have the scale of the industrial revolution and the speed of the digital revolution.” The firm believes that, at this moment, governments, corporations and consumers are all aligned in driving this sustainability revolution, setting the stage for the fund’s launch.
Fund Seeks To Stand Out
Though funds focused on sustainability have been gaining traction recently in terms of assets as well as the number of products available from issuers, there are a few key differentiators for this fund.
GSFP takes a holistic approach to sustainability. The fund focuses on five themes: clean energy, resource efficiency, sustainable consumption, the circular economy and water sustainability. This means the portfolio includes ideas such as sustainable fashion, plant-based nutrition and building efficiency.
The fund has flexibility to invest in domestic or international companies, including those in emerging markets. The rationale is that sustainability issues are a global problem and companies around the world are looking for solutions to these issues.
The fund also takes an all-cap approach. Approximately 20% of the portfolio is invested in companies with a market cap of less than $10 billion. The resulting portfolio will have between 40-60 holdings. While the fund is actively managed, it is expected to be a low turnover strategy.
Goldman Sachs already offers the passively managed $472 million Goldman Sachs Innovate Equity ETF (GINN), which made its debut last year.