Goldman Sachs Asset Management has debuted its first actively managed ETF with the launch of the Goldman Sachs Future Planet Equity ETF (GSFP US) on NYSE Arca.
Katie Koch, co-Head of Fundamental Equity at Goldman Sachs Asset Management.
The ETF is managed by Goldman’s Fundamental Equity business which currently oversees more than $19 billion in thematic equity strategies.
The fully transparent fund invests in a global portfolio of 40 to 60 companies, including firms listed in emerging markets, which have a positive impact on the planet across five key themes: clean energy, resource efficiency, sustainable consumption, the circular economy, and water sustainability.
Clean energy represents companies with operations linked to solar energy, wind energy, bioenergy, energy storage, grid services, and carbon sequestration.
Resource efficiency represents companies with operations linked to electric and autonomous vehicles, sustainable manufacturing, logistics, and smart cities.
Sustainable consumption represents companies with operations linked to agriculture, food, tourism, and fashion.
The circular economy represents companies with operations linked to recycling and reuse, waste management, and single-use substitution.
Water sustainability represents companies with operations linked to water treatment, water distribution, and desalination.
Alignment with these themes is generally assessed by taking into account companies’ revenues, earnings, capital expenditure, intrinsic value, future growth, and corporate strategy.
Security selection is driven by bottom-up analysis of both fundamental and environmental, social, and governance (ESG) factors. The fund may invest without restriction in firms from any market capitalization.
As of 16 July, the fund held 51 names in its portfolio with significant exposure to stocks listed in the US (39.1%), Japan (11.2%), The Netherlands (6.1%), Denmark (6.0%), and China (4.9%). Stocks from the industrials and materials sectors dominated with weights of 30.6% and 25.1%, respectively, with information technology (18.7%) and utilities (12.1%) also playing notable roles. The portfolio is well-diversified at the constituent level with the largest holding, Ecolab, accounting for a weight of 4.1%.
The ETF comes with an expense ratio of 0.75%.
Sustainability revolution
Katie Koch, co-Head of Fundamental Equity at Goldman Sachs Asset Management, said: “Rapid change is disrupting the status quo across industries and around the world. We believe we are on the cusp of a sustainability revolution that could have the scale of the industrial revolution and the speed of the digital revolution. In our view, this may give rise to a unique wealth creation opportunity for investors over the next decade.”
Margaret Anadu, Global Head of Sustainability and Impact at Goldman Sachs Asset Management, said: “Climate transition is not only a central issue for markets and economies but is also having a greater real-time impact on individuals, families, and communities around the world. This ETF creates an opportunity for a broader set of investors to align their portfolio with this key trend.”
Alexis Deladerrière, Head of International Developed Equities within Goldman Sachs Asset Management’s Fundamental Equity team, said: “We believe we’re at a key inflection point: for the first time ever, governments, corporates, and consumers are all aligned in driving a global sustainability revolution, but the scale of the challenge is so large that a holistic approach is necessary. GSFP will seek to invest in companies providing solutions to a variety of environmental challenges that are critical to supporting our planet for future generations.”
Mike Crinieri, Global Head of ETFs at Goldman Sachs Asset Management, said: “By combining the expertise of our fundamental equity investors with the benefits of the ETF wrapper, we are able to provide our clients with an innovative, tax-efficient investment solution. ETFs seek to provide greater tax efficiency, transparency and trading flexibility than traditional mutual funds.”