Goldman Sachs debuts core ‘MarketBeta’ ETFs

May 18th, 2020 | By | Category: Equities

Goldman Sachs Asset Management (GSAM) has become the latest investment giant to roll out its own range of competitively priced core ETFs.

Goldman Sachs debuts core ETFs under MarketBeta brand

GSAM’s MarketBeta ETFs provide low-cost access to core portfolio exposures.

Up to now, the firm has been known within ETFs for its suite of ‘ActiveShares’ smart beta ETFs.

Debuting under the newly unveiled ‘MarketBeta’ brand, the three ETFs track Solactive indices and provide economical access to market-cap-weighted portfolios of US, developed ex-North America, and emerging market stocks.

They have been listed on Cboe BZX Exchange.

The Goldman Sachs MarketBeta US Equity ETF (GSUS US) tracks the Solactive GBS United States Large & Mid Cap Index and has been seeded with $10 million. It comes with an expense ratio of 0.07%.

The Goldman Sachs MarketBeta International Equity ETF (GSID US) is linked to the Solactive GBS Developed Markets ex-North America Large & Mid Cap Index and has been seeded with $20m. Its expense ratio is 0.20%.

Lastly, the Goldman Sachs MarketBeta Emerging Markets Equity ETF (GSEE US) tracks the Solactive GBS Emerging Markets Large & Mid Cap Index and has been launched with $40m of seed capital. It comes with a TER of 0.36%.

Each index aims to cover the large- and mid-cap segments of its respective universe by including approximately 85% of the total market capitalization.

Firms must have an average daily trading value of $1m, a free-float above 10%, and a foreign ownership limit of at least 10% to be eligible for selection. China A-shares are included in the emerging markets index at an inclusion factor of 20%.

The indices are weighted by free-float market capitalization and adjusted on a semi-annual basis. To limit turnover in the index, firms will only be excluded if they fall below the threshold that covers 90% of the universe’s total market capitalization.

While all three funds are certainly priced lower than the average ETF in the same category, they fall some way short of being the cheapest. BlackRock, Vanguard, State Street Global Advisors, and Schwab have already pushed fees to rock-bottom levels over the past few years.

Financial services giant BNY Mellon appears set on making an impact, having launched eight ultra-low-cost funds including two ETFs with zero-fees. Amongst its offering are the BNY Mellon US Large Cap Core Equity ETF (BKLC US), which charges no management fees; the BNY Mellon International Equity ETF (BKIE US), which comes with an expense ratio of 0.04%; and the BNY Mellon Emerging Markets Equity ETF (BKEM US), which costs 0.11% – all comparable to GSAM’s new funds.

Despite this competitiveness, GSAM’s line-up is still likely to make a splash given the firm’s not-insignificant resources and substantial brand strength.

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