Goldman Launches Motif Backed ETFs

March 07, 2019

On Thursday, Goldman Sachs Asset Management (GSAM) launched a new suite of five innovation-focused ETFs using benchmarks from Motif Capital Management, a wholly owned subsidiary of Motif Investing.

The funds invest across sectors, sizes and geographies to capture narrowly focused tech themes that are driving "transformational change" to the worldwide economy, said Mike Crinieri, GSAM’s global head of ETF strategy, in a press release announcing the launch.

The five ETFs, which are the first to use Motif indexes, are:

  • The Goldman Sachs Motif Data-Driven World ETF (GDAT)
  • The Goldman Sachs Motif Finance Reimagined ETF (GFIN)
  • The Goldman Sachs Motif Human Evolution ETF (GDNA)
  • The Goldman Sachs Motif Manufacturing Revolution ETF (GMAN)
  • The Goldman Sachs Motif New Age Consumer ETF (GBUY)

Each fund costs 0.50% and lists on the NYSE Arca.

Measuring By ‘Thematic Beta’

The new ETFs track rules-based indexes that evaluate potential stocks according to their "thematic beta," a measure of how exposed stocks are to a given theme (read: "Goldman Files For 'Motif' ETFs").

Thematic beta—the concept underpinning Motif's signature benchmarks—is determined by analyzing data from a range of publicly available sources, including regulatory filings, academic papers and patent filings.

Stocks are selected and weighted within each index using a proprietary algorithm. Eligible companies must have at least $500 million in market capitalization, $1 million in average daily trading volume over the past month, and at least 50 days of historical returns over the past 90 days. They must also provide at least a minimum level of exposure to the theme in question, and not exceed certain weighting caps.

The final indexes each have up to 120 companies in them, with stocks domiciled in Australia, Canada, France, Germany, Hong Kong, Japan, South Korea, Switzerland, the Netherlands, the U.K. and the U.S.

Behind The 5 Motifs

Each fund is designed to capture a different transformational change impacting the global economy. "Technology is impacting every aspect of our daily lives," said Crinieri in the press release. "It has grown from a single sector to a key driver of every sector."

GDAT tracks companies in developed markets that will most benefit from the increasing (and increasingly rapid) digitization of data. Companies in the index fall along several subthemes: the internet of things, data infrastructure, big data, cybersecurity and artificial intelligence.

GFIN offers exposure to developed-market companies benefiting from the evolution in how the financial industry delivers its services, including those involved in the digitization of finance, the migration to low-cost passive investments and blockchain technology.

GDNA invests in companies that benefit from the development of new medical treatments and technology used to treat humans throughout their lives. The category includes the subthemes of precision medicine, genomics, life extension, robotics surgery and consumer health care.

GMAN covers companies involved in the use of new materials, energy sources and methods in the manufacturing process and also the manufacture of new products, including the subthemes of robotics, 3D printing, autonomous vehicles, drones and clean energy.

GBUY targets companies that benefit from structural shifts in consumer markets caused by changing demographics, advances in technology and widespread preferences, including the subthemes of e-commerce, social media, online gaming, online music and video, experiences on goods, evolution of education, and health and wellness.

Contact Lara Crigger at [email protected]

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