Goldman Sachs Asset Management (“GSAM”) today announced the launch of the Goldman Sachs ActiveBeta® International Equity ETF (Ticker: GSIE), which aims to provide exposure to investment opportunities across developed equity markets outside of the United States. The Fund marks Goldman Sachs’ latest addition to its lineup of ActiveBeta® exchange-traded funds, offering access to equities exposure across the globe. GSIE will seek to track GSAM's proprietary Goldman Sachs ActiveBeta® International Equity Index.
“The Goldman Sachs ActiveBeta® International Equity ETF leverages our broad global expertise to deliver access to slices of international markets in a sophisticated and cost-effective way,” said Michael Crinieri, GSAM's Global Head of ETF Strategies. “With the addition of GSIE to our ActiveBeta® lineup, investors are even further equipped to capitalize on investment opportunities stemming from structural adjustments abroad and manage risk brought on by increasingly volatile markets.”
The Goldman Sachs ActiveBeta® International Equity ETF began trading on the NYSE Arca today, with $20 million in assets, and is priced competitively at a cost of 35 basis points (bps), 26% lower than the Strategic Beta average in the Foreign Large Blend Morningstar Category and 13% lower than the Index Fund average in the category1. GSIE joins the two ActiveBeta® ETFs that GSAM launched in September: the Goldman Sachs ActiveBeta® U.S. Large Cap Equity ETF (GSLC) and the Goldman Sachs ActiveBeta® Emerging Markets Equity ETF (GEM). Since their launch, GSLC and GEM have grown to over $105 million and $181 million in assets, respectively, as of October 30, 2015. On October 22, GSLC had its single highest trading volume to date of 353,421 shares2.
GSIE seeks to track the Goldman Sachs ActiveBeta® International Equity Index, which is constructed using a performance-seeking methodology from Goldman Sachs. The index weights stocks in the MSCI World ex USA Index – which as of November 6, 2015, consisted of 1005 securities from issuers in 22 developed market countries – on four well-established attributes of performance:
1. Value — The index identifies stocks from companies that may be undervalued by the rest of the market. This can help investors to gain exposure to high potential stocks that others may have overlooked.
2. Momentum — The index identifies stocks with prices that have been growing. This allows investors to participate in market trends.
3. Quality — The index identifies stocks from companies that demonstrate sustainable profitability over time. This enables investors to gain exposure to companies with strong fundamentals and potential for consistent returns.
4. Low volatility — The index identifies stocks from companies that are likely to avoid extreme price swings. This aims to smooth out the ride, so investors can stay invested for the long term.
“We aim to consistently deliver world-class investment solutions to our clients, and the launch of our third ActiveBeta® product underscores our commitment to not only meet but to anticipate the needs of investors by offering what we consider to be the next generation of ETF investing,” said Gary Chropuvka, Head of Customized Beta Strategies within the Quantitative Investment Strategies team.
GSAM is dedicated to continuing to provide unique investment solutions to clients in a response to growing demand.
GSAM is the asset management arm of The Goldman Sachs Group, Inc. (NYSE: GS), which supervises $1.19 trillion in assets as of September 30, 20153. Goldman Sachs Asset Management has been providing discretionary investment advisory services since 1988 and has investment professionals in all major financial centers around the world. The company offers investment strategies across a broad range of asset classes to institutional and individual clients globally. Founded in 1869, Goldman Sachs is a leading global investment banking, securities and investment management firm that provides a wide range of financial services to a substantial and diversified client base that includes corporations, financial institutions, governments and high-net-worth individuals.
1 Source: Bloomberg
2 Source: Bloomberg
3 Assets Under Supervision (AUS) includes assets under management and other client assets for which Goldman Sachs does not have full discretion.
ActiveBeta® ETFs use a preset investing strategy like traditional ETFs to keep costs competitive. “Smart beta” refers to quantitative index-based strategies. Source: Morningstar, as of June 30, 2015.
The Goldman Sachs ActiveBeta® International Equity ETF is priced at 35 basis points (bps) (after expense limitation). GSIE’s expense ratio is 26% lower cost than the Strategic Beta average in the Foreign Large Blend Morningstar Category and 13% lower than the Index Fund average in the category, as of October 2, 2015. This is based on Morningstar’s definition of Strategic Beta as well as Morningstar’s definition of the Multi-factor Strategic Beta Attribute as of October 2, 2015. This data only includes ETFs.
Ordinary brokerage commissions apply. Brokerage commissions will reduce returns.
Please note that the fund managers of the Goldman Sachs ActiveBeta® ETFs are Steve Jeneste and Raj Garigipati. Please refer to the Prospectus for further information.
ActiveBeta® is a registered trademark of GSAM and has been licensed for use by Goldman Sachs ETF Trust. The ActiveBeta® Portfolio Construction and Maintenance Methodology is the patent-protected property of GSAM (U.S. Patent Numbers 8,285,620 and 8,473,398).
Fund Risk Considerations
Goldman Sachs ActiveBeta® International Equity ETF
The Goldman Sachs ActiveBeta® International Equity ETF(the “Fund”) seeks to provide investment results that closely correspond, before fees and expenses, to the performance of the Goldman Sachs ActiveBeta® International Equity Index (the “Index”), which delivers exposure to equity securities of developed markets issuers outside of the United States. The Fund’s equity investments are subject to market risk, which means that the value of the securities in which it invests may go up or down in response to the prospects of individual companies, particular sectors and/or general economic conditions. Foreign investments may be more volatile and less liquid than investments in U.S. securities and are subject to the risks of currency fluctuations and adverse economic or political developments. Because the Fund may concentrate its investments in an industry or group of industries to the extent that the Index is concentrated, the Fund may be subject to greater risk of loss as a result of adverse economic, business or other developments affecting that industry or group of industries. The securities of mid- and small-capitalization companies involve greater risks than those associated with larger, more established companies and may be subject to more abrupt or erratic price movements. The Fund is not actively managed, and therefore the Fund will not generally dispose of a security unless the security is removed from the Index. The Index calculation methodology may rely on information based on assumptions and estimates and neither the Fund nor its investment adviser can guarantee the accuracy of the methodology’s assessment of included issuers. Performance may vary substantially from the performance of the Index as a result of transaction costs, expenses and other factors.
Goldman Sachs ActiveBeta® Emerging Markets Equity ETF
The Goldman Sachs ActiveBeta® Emerging Markets Equity ETF (the “Fund”) seeks to provide investment results that closely correspond, before fees and expenses, to the performance of the Goldman Sachs ActiveBeta® Emerging Markets Equity Index (the “Index”), which delivers exposure to equity securities of emerging market issuers. The Fund’s equity investments are subject to market risk, which means that the value of the securities in which it invests may go up or down in response to the prospects of individual companies, particular sectors and/or general economic conditions. Foreign and emerging markets investments may be more volatile and less liquid than investments in U.S. securities and are subject to the risks of currency fluctuations and adverse economic or political developments. Because the Fund may concentrate its investments in an industry or group of industries to the extent that the Index is concentrated, the Fund may be subject to greater risk of loss as a result of adverse economic, business or other developments affecting that industry or group of industries. The securities of mid- and small-capitalization companies involve greater risks than those associated with larger, more established companies and may be subject to more abrupt or erratic price movements. The Fund effects creation and redemption transactions partially for cash, which means an investment in the Fund may be less tax-efficient than an investment in a conventional exchange-traded fund. The Fund is not actively managed, and therefore the Fund will not generally dispose of a security unless the security is removed from the Index. The Index calculation methodology may rely on information based on assumptions and estimates and neither the Fund nor its investment adviser can guarantee the accuracy of the methodology’s assessment of included issuers. Performance may vary substantially from the performance of the Index as a result of transaction costs, expenses and other factors.
Goldman Sachs ActiveBeta® U.S. Large Cap Equity ETF
The Goldman Sachs ActiveBeta® U.S. Large Cap Equity ETF (the “Fund”) seeks to provide investment results that closely correspond, before fees and expenses, to the performance of the Goldman Sachs ActiveBeta® U.S. Large Cap Equity Index (the “Index”), which delivers exposure to equity securities of large-capitalization U.S. issuers. The Fund’s equity investments are subject to market risk, which means that the value of the securities in which it invests may go up or down in response to the prospects of individual companies, particular sectors and/or general economic conditions. Because the Fund may concentrate its investments in an industry or group of industries to the extent that the Index is concentrated, the Fund may be subject to greater risk of loss as a result of adverse economic, business or other developments affecting that industry or group of industries. The Fund is not actively managed, and therefore the Fund will not generally dispose of a security unless the security is removed from the Index. The Index calculation methodology may rely on information based on assumptions and estimates and neither the Fund nor its investment adviser can guarantee the accuracy of the methodology’s assessment of included issuers. Performance may vary substantially from the performance of the Index as a result of transaction costs, expenses and other factors
Shares of each fund are not individually redeemable and are issued and redeemed by the Fund at their net asset value (“NAV”) only in large, specified blocks of shares called creation units. Shares otherwise can be bought and sold only through exchange trading at market price (not NAV). Shares may trade at a premium or discount to their NAV in the secondary market. Brokerage commissions will reduce returns.
Each fund is recently or newly organized and has limited or no operating history.
Investors can lose money by investing in the Funds. For additional risk considerations, please see the above disclosures.
The Goldman Sachs ActiveBeta® International Equity Index (“the Index”) is designed to deliver exposure to equity securities of developed markets issuers outside the United States. The Index is constructed using the patented ActiveBeta® Portfolio Construction Methodology, which was developed to provide exposure to the “factors” (or characteristics) that are commonly tied to a stock’s outperformance relative to market returns. These factors include value (i.e., how attractively a stock is priced relative to its “fundamentals,” such as book value and free cash flow), momentum (i.e., whether a company’s share price is trending up or down), quality (i.e., profitability) and low volatility (i.e., a relatively low degree of fluctuation in a company’s share price over time). Given the Fund’s investment objective of attempting to track its Index, the Fund does not follow traditional methods of active investment management, which may involve buying and selling securities based upon analysis of economic and market factors.
The Goldman Sachs ActiveBeta® Emerging Markets Equity Index (“the Index”) is designed to deliver exposure to equity securities of emerging market issuers. The Index is constructed using the patented ActiveBeta® Portfolio Construction Methodology, which was developed to provide exposure to the “factors” (or characteristics) that are commonly tied to a stock’s outperformance relative to market returns. These factors include value (i.e., how attractively a stock is priced relative to its “fundamentals,” such as book value and free cash flow), momentum (i.e., whether a company’s share price is trending up or down), quality (i.e., profitability) and low volatility (i.e., a relatively low degree of fluctuation in a company’s share price over time). Given the Fund’s investment objective of attempting to track its Index, the Fund does not follow traditional methods of active investment management, which may involve buying and selling securities based upon analysis of economic and market factors.
The Goldman Sachs ActiveBeta® U.S. Large Cap Equity Index (“the Index”) is designed to deliver exposure to equity securities of large capitalization U.S. issuers. The Index is constructed using the patented ActiveBeta® Portfolio Construction Methodology, which was developed to provide exposure to the “factors” (or characteristics) that are commonly tied to a stock’s outperformance relative to market returns. These factors include value (i.e., how attractively a stock is priced relative to its “fundamentals,” such as book value and free cash flow), momentum (i.e., whether a company’s share price is trending up or down), quality (i.e., profitability) and low volatility (i.e., a relatively low degree of fluctuation in a company’s share price over time). Given the Fund’s investment objective of attempting to track its Index, the Fund does not follow traditional methods of active investment management, which may involve buying and selling securities based upon analysis of economic and market factors.
The MSCI World ex USA Index, which captures large and mid cap representation across 22 of 23 Developed Markets countries, excluding the United States, was used by Goldman Sachs as the reference universe for selection of the companies included in the index the Goldman Sachs ActiveBeta® International Equity ETF seeks to track. MSCI Inc. does not in any way sponsor, support, promote or endorse the Goldman Sachs ActiveBeta® International Equity ETF. In no event shall any MSCI Party have any liability for any direct, indirect, special, incidental, punitive, consequential (including without limitation lost profits) or any other damages in connection with the Goldman Sachs ActiveBeta® International Equity ETF.
Please note that one may not invest directly into an index.
ALPS Distributors, Inc. is the distributor of the Goldman Sachs ETFs.
ALPS Distributors, Inc. is unaffiliated with Goldman Sachs Asset Management.
Please consider a fund's objectives, risks, and charges and expenses, and read the summary prospectus, if available, and the Prospectus carefully before investing. A summary prospectus, if available, or a Prospectus for the Fund containing more information may be obtained from your authorized dealer or from Goldman, Sachs & Co. by calling (1-800-621-2550).
Compliance code: 11092015.ip.mf.otu
Date of first use: 11/10/2015
ALPS Control: GST 149 ED 11/10/2016
© 2015 Goldman Sachs. All rights reserved.
NOT FDIC INSURED. MAY LOSE VALUE. NO BANK GUARANTEE. NOT INSURED BY ANY GOVERNMENT AGENCY.
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