Goldman Sachs Asset Management has rolled out a trio of thematic equity ETFs on NYSE Arca.
Julian Salisbury, Global Head of Goldman Sachs Asset Management.
The funds, which are actively managed and fully transparent, provide exposure to companies around the world that have been identified by GSAM to be beneficiaries of long-term, secular growth trends.
The funds are the Goldman Sachs Future Consumer Equity ETF (GBUY US), which invests in companies aligned with the spending habits of younger consumers; the Goldman Sachs Future Health Care Equity ETF (GDOC US) which invests in companies at the forefront of healthcare innovation; and the Goldman Sachs Future Real Estate and Infrastructure Equity ETF (GREI US) which invests in real estate and infrastructure companies that are well placed to benefit from secular disruption.
Commenting on the launch, Julian Salisbury, Global Head of Goldman Sachs Asset Management, said: “The pace of disruption is accelerating and we want to help our clients position their portfolios on the right side of that disruption. These funds expand our suite of actively managed thematic ETFs and provide focused exposure to key secular growth trends that we are seeing across industries.”
Katie Koch, the firm’s co-head of fundamental equity, added that “investors need to think differently about their portfolios” as, according to GSAM’s analysis, the traditional 60% equity/40% fixed income portfolio is set to return less than 5% per year in the coming decade, compared to the 10% per year in the previous decade. “In our view, aligning your portfolio with key secular growth trends presents a unique wealth creation opportunity.”
Stock selection for the funds is conducted by GSAM’s fundamental equity team, which is made up of more than 80 investment professionals with an average of 14 years of experience. Implementation of the strategies is delivered by the firm’s quantitative investment strategies team, comprising over 95 investment professionals with an average of over 15 years of experience.
Stock selection is driven by a bottom-up process that is paired with a disciplined approach to valuation.
GSAM launched its first thematic strategy six years ago and now has over $22 billion under management in thematic equity strategies.
The funds
GBUY invests in companies across any sector that are aligned with the different and evolving priorities and spending habits of younger consumers, including the increased adoption of technology and their different lifestyle preferences and values. With nearly five billion people under the age of 40 worldwide, Millennials, and increasingly Generation Z, are, according to GSAM, the world’s most powerful consumer force. Their collective income already eclipses that of all other generations and, as a result, they’re driving growth in spending and are set to dominate the consumer landscape for decades to come.
GDOC invests in health care companies that are driving innovation, by developing either new treatments or new technologies, primarily in the fields of genomics, precision medicine, technology-enabled procedures and digital healthcare. GSAM notes that over the last few decades, technological advancements in the health care industry have driven an unprecedented amount of innovation. At the same time, cost curves have declined dramatically, bringing the industry to a key inflection point. Unlike traditional health care sector funds, GDOC focuses on companies driving innovation. According to GSAM, the fund offers investors more diversified exposure to innovation than biotech funds as it has the ability to invest in all areas of innovation within health care.
GREI invests in real estate and infrastructure companies that are seen to be aligned with secular growth trends including innovation, demographic shifts, experiences over things, environmental sustainability, and social sustainability while avoiding areas of the asset class that may be on the wrong side of disruption. The fund invests across both real estate and infrastructure assets, expanding the opportunity set. Since real estate and infrastructure assets offer unique investment attributes including attractive yield, relatively predictable growth, lower volatility than broad equities, and low correlations with other asset classes, GREI offers investors a complementary way of gaining exposure to secular growth.
Each fund comes with a net expense ratio of 0.75%.
The new funds follow the recent launches of the Goldman Sachs Future Tech Leaders Equity ETF (GTEK US) in September and the Goldman Sachs Future Planet Equity ETF (GSFP US) in July.
GSAM currently manages $27.5 billion in ETF assets globally.