Over the last two decades, investors have increasingly turned to Exchange-Traded Funds (ETFs) seeking to benefit from a defined strategy, diversified exposure to stocks, tax efficiency and low costs. Today, we combine the potential benefits of ETFs with the advanced strategies of Goldman Sachs Asset Management (GSAM).
ETFs have grown in popularity due to the many benefits they offer: intraday trading ease, relative transparency and a likelihood of tax efficiency—all typically at lower total cost than most actively managed mutual funds.
Source: GSAM. For illustrative purposes only.
We note that ETFs are not riskless investments, so investors can lose money. Please see the ETF Risk Disclosures for additional risk considerations in the end disclosures. Ordinary brokerage commissions apply. Brokerage commissions will reduce returns.
Goldman Sachs does not provide legal, tax or accounting advice to its clients. All investors are strongly urged to consult with their legal, tax, or accounting advisors regarding any potential transactions or investments. There is no assurance that the tax status or treatment of a proposed transaction or investment will continue in the future. Tax treatment or status may be changed by law or government action in the future or on a retroactive basis.
GSAM has developed a series of ETFs built on smart beta¹ principles—a transparent, rules-based strategy that goes beyond stocks’ market capitalization, resulting in a more economically intuitive way to invest.
These ETFs are designed to track an ActiveBeta® Index, a proprietary performance-seeking methodology from Goldman Sachs, which tilts towards stocks based on four well-established drivers of performance, often referred to as factors.
To construct the ActiveBeta® Index, GSAM employs a simple, transparent process that helps identify and emphasize stocks within the market-cap weighted universe, potentially providing greater returns.
Individual factors can be cyclical in the short run, which may lead to timing and performance challenges. Combining four complementary smart beta factors equally can potentially result in a more consistent investment experience over time.
Not only are ActiveBeta® ETFs a fraction of the price of most smart beta ETFs, they are also among the most competitively priced products on the market.2
Source: Morningstar and GSAM as of September 30, 2018. For illustrative purposes only.
There is no guarantee that these objectives will be met. ActiveBeta® is a trademark of Goldman Sachs. 9.0 bps (after expense limitation) for ActiveBeta® U.S. Large Cap. Equity ETF refers to the Goldman Sachs ActiveBeta® U.S. Large Cap Equity ETF. 33.7 bps refers to the average fund fee for Strategic Beta ETFs in the Morningstar US ETF Large Blend Category and 30.0 bps refers to the average fund fee of index ETFs in the Morningstar US ETF Large Blend Category.
Technological innovation continues to disrupt traditional industries and create new structural growth opportunities. The degree to which companies and investors embrace the next wave of technological innovation will be critical to their longevity and success. We believe the creators and adopters of innovation are poised to become market leaders.
We believe a “tech-tonic” shift is occurring—technology is no longer a single industry, technology is permeating all industries. We have identified five key themes that we believe are the potential drivers of secular change and capture future earnings growth.
The Goldman Sachs Motif ETFs seek to track indices created by Motif, an industry leader in applying data science and automation to construct bespoke indices.3 Motif analyzes traditional and alternative data to identify the creators and adopters of innovation—irrespective of traditional classifications—an approach we believe is necessary, given the rapidly evolving landscape.
The Goldman Sachs Motif ETFs allow investors to capture innovation by investing directly in technology-driven secular change. The ETFs may be suitable as either a long-term core equity holding or a satellite allocation for exposure to individual themes.
Goldman Sachs Just ETF seeks to provide broad exposure to U.S. large cap equities, with a focus on companies that demonstrate just business behavior as measured by JUST Capital. The Fund seeks to track the JUST U.S. Large Cap Diversified Index (the “Index”), which is constructed by JUST Capital.
JUST Capital collects and analyzes data from a diverse range of sources, utilizing over 120,000 data points across 85 unique metrics to score the performance of Russell 1000 Index companies across a variety of issues, including worker treatment, customer concerns and environmental impacts.
The Index provides market cap-weighted exposure to companies with above-average JUST scores based on the most recent rankings within each industry group; sector neutrality may contribute to a low tracking error. The Index aims to help investors allocate more capital towards their values, without compromising on return potential.
Priced to investors at 20 basis points (bps), JUST may be a lower cost solution for your portfolio.4 JUST may exhibit high correlation to both the S&P 500 and the Russell 1000, making it a suitable core U.S. equity allocation.
The fund seeks to track the Goldman Sachs Hedge Fund VIP Index, which is constructed in accordance with a rules-based methodology derived from concepts previously developed by Goldman Sachs’ Global Investment Research division. The Index is designed to measure the performance of fundamentally-driven hedge fund managers’ “Very-Important-Positions”— those positions that appear most frequently among their top 10 long equity holdings. The Goldman Sachs Hedge Industry VIP ETF (Ticker: GVIP) seeks to deliver these high-conviction ideas through the ease, transparency and liquidity of an ETF.
By tracking an index that targets the 500 largest U.S. equities and rebalances monthly, GSEW is a suitable core holding for investors seeking diversified large cap exposure. Investors in traditional cap-weighted ETFs, actively managed strategies, or smart beta solutions may consider GSEW a diversifier to their existing large cap holdings.
Goldman Sachs Access ETFs seek better risk-adjusted returns to meet the needs of today’s fixed income investor. Access ETFs are passively managed by our Global Fixed Income team.
Our diverse suite of Access ETFs provide smarter access to the bond markets through criteria such as liquidity, technicals or fundamentals.
For passive ETFs, each index employs a simple, transparent7 process that helps identify an investible universe, then eliminates bottom issuers, offering exposure to an existing sector or market beta.8
Access ETFs are among the most competitively priced ETFs on the market9 and offer the benefit of on-exchange liquidity, which may decrease transaction costs.10 In addition, these products provide access, transparency and alleviate some of the challenges of buying bonds in the over-the-counter market.
At Goldman Sachs Asset Management, we have a history of investment innovation—grounded in our commitment to provide clients with solutions that keep up with changing times. Our skilled investment teams manage a variety of advanced strategies** that capitalize on our global reach and deep knowledge of the markets. By offering these advanced strategies as Goldman Sachs ETFs, we continue this legacy and lead the way for the next generation of ETF investing.