Goldman Sachs Enters Core ETF Biz

May 15, 2020

Goldman Sachs Asset Management (GSAM), best known in the ETF market for its low-cost smart beta ActiveShares lineup of funds, is now bringing its expertise to the business of core ETF portfolio construction.

The firm launched this week three ETFs designed as low-cost beta building blocks, entering a space well populated by giant competition from major issuers such as iShares, Vanguard and State Street Global Advisors.

The equity ETFs, each built around Solactive indexes, offer what the firm is calling “market beta exposures” at a very low cost. They are listed on Cboe Global Markets, parent company of ETF.com.

They are:

  • Goldman Sachs MarketBeta U.S. Equity ETF (GSUS)

GSUS is a market-cap-weighted mix of stocks representing about 85% of the U.S. market capitalization, tracking the Solactive GBS United States Large & Mid Cap Index. The fund, which came to market with just under $10 million in assets, holds 504 securities and costs 0.07% in net expense ratio—or $7 per $10,000 invested.

Information technology is the fund’s biggest sector allocation, representing about 27% of the overall portfolio, followed by health care, at 15%. Top holdings include the likes of Apple, Microsoft, Amazon, Facebook and Alphabet.

  • Goldman Sachs MarketBeta Emerging Markets Equity ETF (GSEE)

GSEE accesses about 85% of the emerging market equity space, in a portfolio comprising more than 1,200 securities and tracking the Solactive GBS Emerging Markets Large & Mid Cap Index. The fund has almost $40 million in assets under management right out of the gate, and costs a net 0.36% in expense ratio.

Asia ex-Japan and Latin America are the biggest regional bets, but the biggest single country allocation is Cayman Islands, at 24%, followed by China, at 13%. Financials lead the portfolio’s sector allocation, with a 20% weighting, followed by information technology and consumer discretionary. Top holdings include Alibaba, Tencent, Taiwan Semiconductor Manufacturing, and Samsung.

  • Goldman Sachs MarketBeta International Equity ETF (GSID)

GSID tracks the Solactive GBS Developed Markets ex North America Large & Mid Cap Index, and is a portfolio of nearly 1,000 developed market securities that excludes North America. The fund, covering about 85% of the market cap of the economic region, comes with a net expense ratio of 0.20%, and has nearly $20 million in assets under management.

Europe ex-U.K. represents about 45% of the country allocation, followed by Japan, at 27%, and UK, at 14%. From a sector perspective, health care and financials lead, with about 15% of the mix each, with names like Nestle, Roche, Novartis and AstraZeneca at the top.

(Use our stock finder tool to find an ETF’s allocation to a certain stock.)

Growing Lineup

GSAM manages today 25 ETFs, including the three new launches. The biggest, the Goldman Sachs ActiveBeta U.S. Large Cap Equity ETF (GSLC), has amassed more than $7.5 billion in total assets in just over four years since launch.

The firm’s ETF assets have grown to nearly $17 billion, finding strong traction thanks largely to its focus on low-cost access.

Contact Cinthia Murphy at [email protected]

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