ETF Series to Track Factor-Driven Index — Representing a Next Generation of ETF Investing
NEW YORK–(BUSINESS WIRE)–Goldman Sachs Asset Management (“GSAM”) today announced the launch of its first exchange-traded fund (“ETF”), the ActiveBeta® US Large Cap Equity ETF (Ticker:GSLC).The fund is the first in a series of ETFs that will track GSAM’s proprietary ActiveBeta® index.
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“We are excited to enter the ETF market,” said Tim O’Neill, Global Co-Head of the Investment Management Division, which includes GSAM. “Our approach to ETFs continues our legacy of investment innovation and at a cost that makes them accessible to all investors.”
The ActiveBeta® US Large Cap Equity ETF (GSLC) shares many of the same benefits of traditional ETFs—a defined strategy, diversified exposure to stocks and low costs—but it is powered by the Goldman Sachs ActiveBeta® index, a performance-seeking methodology from Goldman Sachs that delivers the potential to outperform the market.
“Our clients asked us to apply our investment expertise to exchange-traded funds,” said Michael Crinieri, GSAM’s Global Head of ETF Strategies. “We believe ActiveBeta® ETFs create solutions for them and capitalize on our global reach and deep knowledge of the markets.”
The ActiveBeta® index weights stocks based on four well-established attributes of performance:
Good value — The index identifies stocks from companies that may be undervalued by the rest of the market. This can help investors to gain exposure to high potential stocks that others may have overlooked.
Strong momentum — The index identifies stocks with prices that have been growing. This allows investors to participate in market trends.
High quality — The index identifies stocks from companies that demonstrate sustainable profitability over time. This allows investors to gain exposure to companies with strong fundamentals and potential for consistent returns.
Low volatility — The index identifies stocks from companies that are likely to avoid extreme swings up and down in price. This aims to smooth out the ride, so investors can stay invested for the long term.
The ActiveBeta® US Large Cap Equity ETF (Ticker: GSLC) launched today, with $50 million in institutional assets. The fund is priced competitively at a cost of 9 basis points to investors.
The firm plans to launch additional ActiveBeta® ETFs in the coming months.
GSAM is the asset management arm of The Goldman Sachs Group, Inc. (NYSE:GS), which supervises $1.02 trillion in assets as of June 30, 20151. Goldman Sachs Asset Management has been providing discretionary investment advisory services since 1988 and has investment professionals in all major financial centers around the world. The company offers investment strategies across a broad range of asset classes to institutional and individual clients globally. Founded in 1869, Goldman Sachs is a leading global investment banking, securities and investment management firm that provides a wide range of financial services to a substantial and diversified client base that includes corporations, financial institutions, governments and high-net-worth individuals.
1 Assets Under Supervision (AUS) includes assets under management and other client assets for which Goldman Sachs does not have full discretion.
ActiveBeta® ETFs use a preset investing strategy like traditional ETFs to keep costs competitive. “Smart beta” refers to quantitative index-based strategies. Source: Morningstar, as of June 30, 2015.
The Goldman Sachs ActiveBeta® US Large Cap Equity ETF is priced competitively at 9 basis points (bps) based on a universe of funds that include traditional market cap-weighted ETFs and smart beta ETFs. For example, the fee for the largest ETF by AUM, the SPDR S&P 500 ETF Trust (SPY), is priced at 9 bps. Additionally, the average fund fee for the Morningstar US ETF Large Blend Category is 36 bps, and the average fund fee for the Morningstar US ETF Large Blend Strategic Beta Classification is 38 bps.
Ordinary brokerage commissions apply. Brokerage commissions will reduce returns.
Please note that the fund managers of the Goldman Sachs ActiveBeta® ETFs are Steve Jeneste and Raj Garigipati. Please refer to the Prospectus for further information.
ActiveBeta® is a registered trademark of GSAM and has been licensed for use by Goldman Sachs ETF Trust. The ActiveBeta® Portfolio Construction and Maintenance Methodology is the patent-protected property of GSAM (U.S. Patent Numbers 8,285,620 and 8,473,398).
Fund Risk Considerations
Goldman Sachs ActiveBeta® U.S. Large Cap Equity ETF
The Goldman Sachs ActiveBeta® U.S. Large Cap Equity ETF (the “Fund”) seeks to provide investment results that closely correspond, before fees and expenses, to the performance of the Goldman Sachs ActiveBeta® U.S. Large Cap Equity Index (the “Index”), which delivers exposure to equity securities of large-capitalization U.S. issuers. The Fund’s equity investments are subject tomarket risk, which means that the value of the securities in which it invests may go up or down in response to the prospects of individual companies, particular sectors and/or general economic conditions. Because the Fund may concentrate its investments in an industry or group of industries to the extent that the Index is concentrated, the Fund may be subject to greater risk of loss as a result of adverse economic, business or other developments affecting that industry or group of industries. The Fund is not actively managed, and therefore the Fund will not generally dispose of a security unless the security is removed from the Index. The Index calculation methodology may rely on information based on assumptions and estimates and neither the Fund nor its investment adviser can guarantee the accuracy of the methodology’s assessment of included issuers. Performance may vary substantially from the performance of the Index as a result of transaction costs, expenses and other factors.
Fund shares are not individually redeemable and are issued and redeemed by the Fund at their net asset value (“NAV”) only in large, specified blocks of shares called creation units. Shares otherwise can be bought and sold only through exchange trading at market price (not NAV). Shares may trade at a premium or discount to their NAV in the secondary market. Brokerage commissions will reduce returns.
The Fund is newly organized and does not have an operating history.
Investors can lose money by investing in the Fund. For additional risk considerations, please see the above disclosures.
The Goldman Sachs ActiveBeta® U.S. Large Cap Equity Index (“the Index”) is designed to deliver exposure to equity securities of large capitalization U.S. issuers. The Index seeks to capture common sources of active equity returns, including value (i.e., how attractively a stock is priced relative to its “fundamentals”, such as book value or free cash flow), momentum (i.e., whether a company’s share price is trending up or down), quality (i.e., profitability) and low volatility (i.e., a relatively low degree of fluctuation in a company’s share price over time). The Index is reconstituted and rebalanced quarterly. It is not possible to invest directly in an unmanaged index.
Please note that one may not invest directly into an index.
ALPS Distributors, Inc. is the distributor of the Goldman Sachs ETFs.
ALPS Distributors, Inc. is unaffiliated with Goldman Sachs Asset Management.
This material is not authorized for distribution unless preceded or accompanied by a current prospectus or summary prospectus, if applicable. Investors should consider a fund’s objectives, risks, and charges and expenses, and read the summary prospectus, if available, and the prospectus carefully before investing or sending money. The summary prospectus, if available, and the Prospectus contains this and other information about the Fund.
Compliance code: 169338.MF.TMPL/9/2015
Date of first use: September 21, 2015
ALPS Control: GST 113 ED 9/21/2016
© 2015 Goldman Sachs. All rights reserved.
NOT FDIC INSURED. MAY LOSE VALUE. NO BANK GUARANTEE. NOT INSURED BY ANY GOVERNMENT AGENCY.
Andrew Williams, 212-902-5400
Hillary Yaffe, 212-279-3115