Goldman Sachs Asset Management has launched the Goldman Sachs Future Tech Leaders Equity ETF (GTEK). GTEK is a fully transparent, actively managed equity ETF that aims to generally invest in listed technology companies with market capitalisations of less than USD100 billion, across both developed and emerging markets. Goldman Sachs intends to invest in GTEK alongside its clients.
“With almost a quarter of S&P 500 market capitalisation in the top 1 per cent of stocks, many investors are overexposed to mature US mega cap technology companies,” says Katie Koch, co-head of the Fundamental Equity business within Goldman Sachs Asset Management. “We believe the dominant tech franchises in 10 years will be very different from the platforms we all know today. We are working diligently on behalf of our clients to try and identify future tech leaders with robust growth rates and the potential for outsized returns.”
The firm writes that being at the forefront of technological innovation is critical to success in a digital world, where the pace of change continues to accelerate. “Most of the innovation we’ve seen in tech over the past few decades has been concentrated in the US and centred around a few companies,” says Sung Cho, portfolio manager of GTEK, “but we believe we’re at a key inflection point, with tech innovation expanding to other geographies and down the market capitalisation spectrum.”
GTEK will seek to identify potential future tech leaders through active, bottom-up security selection with a disciplined approach to valuation. “GTEK will aim to provide exposure to our high conviction technology investment ideas globally, in a way that may complement investors’ existing portfolios,” says Brook Dane, portfolio manager of GTEK. “We see many exciting opportunities in areas including smart components, digital transformation, fintech, and cybersecurity. The current health pandemic has further accelerated the digitisation trend, creating additional secular growth tailwinds, which we want to help investors get on the right side of to position their portfolios for the future.”
The firm writes that by investing in a fully transparent active ETF, investors may benefit further from being able to access these opportunities through an innovative wrapper. “By combining the expertise of our Fundamental Equity investors with the benefits of the ETF vehicle – including greater tax efficiency, transparency and trading flexibility than traditional mutual funds – we are able to provide our clients with compelling, tax efficient investment solutions,” says Mike Crinieri, global head of ETFs within Goldman Sachs Asset Management.
The launch of GTEK expands the firm’s existing suite of thematic ETFs designed to help investors position their portfolios on the right side of disruption by providing focused exposure to long-term secular growth trends. Goldman Sachs Asset Management’s Fundamental Equity business manages over USD20 billion in thematic equity strategies and has been investing in dedicated technology equity strategies for over 20 years. GTEK, the GS Future Planet Equity ETF (GSFP) and the GS Innovate Equity ETF (GINN) make the firm’s thematic equity strategies accessible to US-based investors in an innovative wrapper.
GTEK is an actively managed ETF, which is one that trades on an exchange like other publicly-traded securities, and it will trade on NYSE Arca, Inc. under the ticker symbol GTEK. GTEK is not an index fund and does not seek to replicate the performance of a specified index.