Goldman Sachs unveils actively managed ultra-short bond ETF

Apr 18th, 2019 | By | Category: Fixed Income

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Goldman Sachs has launched a new actively managed ETF in the US which provides exposure to high quality fixed income securities while maintaining portfolio duration of less than one year.

Goldman Sachs unveils actively managed ultra-short bond ETF

The fund aims to maintain a portfolio duration of less than one year.

The Goldman Sachs Access Ultra Short Bond ETF (GSST US) has listed on Cboe BZX and seeks to maximize current income while preserving capital.

The fund invests in US dollar-denominated securities that are rated investment grade and may select its constituents from a broad universe that includes government bonds, agency bonds, mortgage-backed securities, asset-backed securities, municipal obligations, bank obligations, corporate notes, commercial paper, collateralized loan obligations, and repurchase agreements.

The portfolio will invest more than 25% of its assets in securities issued by financial services companies. Foreign issuers are also eligible for inclusion in the fund.

The ETF comes with a net expense ratio of 0.16% due to a contractual fee waiver in place until at least April 2020. Its gross expense ratio is 0.20%.

The fund will compete against several other actively managed ultra-short duration ETFs, the largest of which is the Pimco Enhanced Short Maturity Active ETF (MINT US). This fund seeks greater income and total return than money market funds. It has current assets under management of nearly $12.0bn and comes with an expense ratio of 0.42%.

JP Morgan and Prudential have also recently launched funds in this space.

The PGIM Ultra Short Bond ETF (PULS US) targets fixed, variable, or floating rate instruments but only from issuers based in the US. It comes with an expense ratio of 0.15% and has AUM of $280m.

Alternatively, the JPMorgan Ultra-Short Income ETF (JPST US) invests primarily in a diversified portfolio of short-term investment-grade fixed and floating-rate corporate and structured debt. Its expense ratio is 0.18% and it has grown its AUM to over $6.7bn.

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