Goldman Sachs Asset Management pumps up innovation ETF pipeline
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Goldman Sachs Asset Management is doubling down on its effort to capture some of the buzz and assets chasing emerging technologies and innovative service businesses.
The manager plans to launch the Goldman Sachs Future Consumer Equity ETF and Goldman Sachs Future Health Care Equity ETF, according to registration statements filed last week.
The consumer ETF intends to buy securities of companies with technology that is associated with social media, ecommerce, fintech, digital workforces and “lifestyle” services. The healthcare strategy fund is expected to invest in a concentrated portfolio of companies associated with innovations in genomics, targeted medicine and digital health.
Fees and expenses were not disclosed.
The products will join a suite of thematic active equity products in Goldman’s ETF pipeline. In January, the New York — based firm filed plans to launch the Goldman Sachs Future Tech Leaders Equity ETF, and in February, the Goldman Sachs Future Planet Equity ETF. Neither fund has launched yet.
All four of the proposed strategies will disclose portfolio holdings daily. Goldman has a separate active nontransparent ETF effort under way, licensing portfolio-shielding technologies from Precidian Investments and Fidelity Investments.
Goldman Sachs declined to comment.
Industry interest in thematic, largely technology-focused equity product development has intensified alongside the meteoric growth of Ark Investments. The New York-based company’s ETFs, which take a transparent, concentrated and sometimes contrarian approach to investing, attracted more than $36bn in net new assets during the year ended March 31, Morningstar Direct’s data show.
Ark’s ETF assets swelled from $10bn in March 2020, to $47bn a year later, vaulting the once-niche player into the circle of the 10 largest US ETF managers.
In October, BlackRock launched a series of active equity ETFs focused on “megatrends” such as disruptive innovation in the technology and healthcare markets. Combined, the three ETFs hold less than $50m in assets, according to FactSet. And in January, Franklin Templeton debuted its $2m Exponential Data ETF, an active equity strategy focused on big data computing hardware, software and surrounding services.
So far in 2021, five active and five passive thematic ETFs have debuted, according to FactSet data. The 10 funds account for about 13 per cent of the ETFs launched in the first three months of the year.
“Given the success of Ark in the past year, many asset managers are seeking to tap into growing investor demand for actively managed equity ETFs using in-house expertise,” said Todd Rosenbluth, director of ETF research at CFRA.
He said there was plenty of capacity for such products, given the hundreds of successful growth-oriented mutual funds on the market from large asset managers and specialist shops.
Goldman will tap portfolio managers from its active equities business to lead the strategies.
Goldman’s 20 ETFs had $22bn in assets as of March 31, according to Morningstar Direct. Those products amassed $2.2bn in net new assets in the 12-month period ended last month. However, investors redeemed $204m in the first three months of 2021.
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