Goldman Sachs Group Inc. isn’t known for its largesse, but when it comes to exchange-traded funds the Wall Street giant is almost giving handouts to its customers.
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The firm’s asset management arm is now offering some of the cheapest smart-beta funds, including a new one that will charge just 9 basis points for a portfolio with exposure to a basket of large-cap stocks that all have the same allocation, a regulatory filing on Monday shows. That’s less expensive than any other comparable equal-weighted fund, as well as the world’s largest and most traded ETF — State Street Corp.’s S&P 500 ETF Trust, better known by the ticker SPY.
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Building a successful ETF business has become a race to the bottom, as money managing Goliaths from BlackRock Inc. to Vanguard Group Inc. find lower cost products win business. Most of the savings have gone to investors in plain vanilla funds that are cheap to run, but Goldman is now pushing the fee war into more complex smart-beta strategies that shun indexes weighted by market capitalization in favor of other factors.