Goldman Sachs Asset Management is planning to re-organize five equity ETFs that collectively house around $300 million in assets under management into a single multi-thematic strategy.
Goldman Sachs will merge its five thematic ETFs into a single fund on 6 November.
The five ETFs were introduced on NYSE Arca in March 2019 and provide passive exposure to themes related to transformational changes in the global economy: data-driven world, finance reimagined, human evolution, manufacturing revolution, and new-age consumer.
Doubts were raised over the funds’ future earlier this year after the ETFs’ index provider, online broker Motif Capital Management, announced it would be shutting down due to an untenable financial position caused by the Covid-19 pandemic.
GSAM ultimately assumed indexing responsibilities as a stop-gap solution.
Under the plan, the ETFs will merge into a single fund on 6 November which will be renamed the Goldman Sachs Innovate Equity ETF. No ticker is yet available.
That ETF will track the Solactive Innovative Global Equity Index which consists of an equal-weighted allocation to the five funds’ current indices.
The indices select their constituents from a potential pool of global developed market stocks with at least $500m in assets under management and a minimum average daily traded volume of $1m.
A rules-based methodology determines each eligible stock’s ‘thematic beta’ – the firm’s exposure to the transformational theme in question. In determining thematic beta, the process looks to traditional and alternative data sources including regulatory filings, academic papers, and patent filings.
Each index selects approximately 120 stocks with the highest thematic beta, and weights these constituents so as to sharpen the exposure to the underlying theme, subject to an individual cap of 5% and a floor of 0.25%.
Michael Crinieri, GSAM’s Global Head of ETFs, commented, “The reorganization is in response to client demand for a single investment product that provides diversified equity exposure across these five themes that we believe are driving technological innovation and secular growth.
“Our ETF franchise has a demonstrated ability to leverage the best of the Goldman Sachs platform and, together with our colleagues in GSAM’s Fundamental Equity business, we believe the reorganization will create a simpler, more accessible yet differentiated way to invest.”
The five ETFs rolling into one are as follows:
Goldman Sachs Motif Data-Driven World ETF
Goldman Sachs Motif Finance Reimagined ETF
Goldman Sachs Motif Human Evolution ETF
Goldman Sachs Motif Manufacturing Revolution ETF
Goldman Sachs Motif New Age Consumer ETF