Goldman Sachs Asset Management has launched three new actively managed, fully transparent equity ETFs: The Goldman Sachs Future Consumer Equity ETF (“GBUY”), the Goldman Sachs Future Health Care Equity ETF (“GDOC”), and the Goldman Sachs Future Real Estate and Infrastructure Equity ETF (“GREI”), collectively the “Funds”.
“The pace of disruption is accelerating and we want to help our clients position their portfolios on the right side of that disruption,” says Julian Salisbury, Global Head of Goldman Sachs Asset Management. “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.”
“Over the last 10 years, traditional 60 per cent equity/40 per cent fixed income portfolios have returned nearly 10 per cent per year, but over the next 10 years they are set to return less than 5 per cent per year,” says Katie Koch, co-head of the Fundamental Equity business within Goldman Sachs Asset Management. “As a result, we believe investors need to think differently about their portfolios and, in our view, aligning your portfolio with key secular growth trends presents a unique wealth creation opportunity.”
The Funds will seek to identify companies around the world that are beneficiaries of secular change through active, bottom-up security selection conducted by experienced investors, combined with a disciplined approach to valuation.
GBUY will seek to invest 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 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 will seek to invest 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. 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 will focus on companies driving innovation. The fund will also offer investors more diversified exposure to innovation than biotech funds as it will have the ability to invest in all areas of innovation within health care.
GREI will seek to invest in real estate and infrastructure companies that are 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 will invest 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 will seek to offer investors a complementary way of gaining exposure to secular growth.
The Fundamental Equity business launched its first thematic strategy six years ago and now has over USD22 billion under management in thematic equity strategies. The firm writes: “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 make our thematic strategies accessible to US-based investors in an innovative wrapper.”
The launch of GBUY, GDOC and GREI follows the recent launch of the Goldman Sachs Future Tech Leaders Equity ETF (GTEK) and the Goldman Sachs Future Planet Equity ETF (GSFP), expanding the firm’s suite of actively managed, transparent thematic equity ETFs and complementing the rules-based Goldman Sachs Innovate Equity ETF (GINN). Goldman Sachs Asset Management currently manages USD27.5 billion in ETF assets globally.