Goldman Sachs Asset Management does not expect any interruption to its suite of five thematic equity ETFs launched in partnership with Motif Capital Management after the fintech firm announced it would be shutting it doors.
The five Goldman Sachs thematic equity ETFs target trends that are making transformational changes to the global economy.
Founded in 2010, Motif is an online broker offering thematic portfolios (called ‘motifs’) created by professional investors. The platform allows users to buy shares in a motif at a low entry point of just $300.
The firm repurposed some of these portfolios to form the basis of indices, independently calculated by Solactive, which were licensed to Goldman Sachs to underlie a series of ETFs brought to market in March 2019.
The ETFs cover themes tracking transformational changes to the global economy: data-driven world, finance reimagined, human evolution, manufacturing revolution, and new-age consumer.
The funds are listed on NYSE Arca, come with expense ratios of 0.50%, and collectively house around $90 million.
While Motif’s business model received support from Silicon Valley investors, picking up over $100m in private equity capital over the years, it appears as though the firm has been unable to reach a position of ongoing economic viability.
And with markets down and client redemptions up as a result of COVID-19, assets under management have likely fallen below a level deemed sustainably feasible.
Motif announced to clients that their assets would be shifted to rival Folio Investing.
According to a statement from Goldman, Motif informed it that it would cease to serve as index provider for the Goldman Sachs ETFs on or about May 15th.
While Motif’s pending departure cast some doubt on the future of the ETFs, Goldman has moved quickly to allay investors’ immediate fears by noting it is in discussions to assume the role of index provider, subject to approval by the ETFs’ board of trustees.
It says, “We do not expect any interruption to the management of the ETFs at the present time, and the ETFs continue to trade on NYSE Arca.”
The funds
The Goldman Sachs Motif Data-Driven World ETF (GDAT US) tracks companies poised to benefit from the increasing digitization of data. Stocks are analyzed along five sub-themes including internet of things, data infrastructure, big data, cybersecurity, and artificial intelligence.
The Goldman Sachs Motif Finance Reimagined ETF (GFIN US) tracks companies poised to benefit from developments in the delivery of financial services. Relevant sub-themes include the digitization of finance, the migration to low-cost passive investments, and blockchain technology.
The Goldman Sachs Motif Human Evolution ETF (GDNA US) tracks health care companies that are most likely to benefit from the development of new medical treatments along the sub-themes of precision medicine, genomics, life extension, robotic surgery, and consumer health care.
The Goldman Sachs Motif Manufacturing Revolution ETF (GMAN US) tracks companies incorporating new technologies to optimize the manufacturing process as well as firms involved in the manufacture of new products across the robotics, 3D printing, autonomous vehicles, drones, and clean energy sub-themes.
The Goldman Sachs Motif New Age Consumer ETF (GBUY US) tracks companies most likely to benefit from recent structural changes in the consumer market across demographics, technology, and preferences. Relevant sub-themes include e-commerce, social media, online gaming, online music and video, experiences on goods, and the evolution of education, health, and wellness.