What You Need to Know
- They focus on consumption by millennials, health care innovation and real estate sustainability.
- All three ETFs are actively managed, relatively concentrated equity portfolios.
- Each fund has a net expense ratio of 0.75%.
Goldman Sachs Asset Management has launched three new actively managed, fully transparent equity ETFs that focus on trends it believes will be key for future global growth: consumption by millennials, innovations in health care, and sustainability in real estate and infrastructure.
The three ETFs are the Goldman Sachs Future Consumer Equity ETF (GBUY), the Goldman Sachs Future Health Care Equity ETF (GDOC) and the Goldman Sachs Future Real Estate and Infrastructure Equity ETF (GREI). All three are relatively concentrated equity funds, and charge a 0.75% fee. The ETFs provide U.S. investors accessibility to investment themes that have been available to the firm’s overseas clients for several years.
“It’s important for investors to position themselves on the right side of innovation and disruption … investing toward the future and not the past,” said Katie Koch, co-head of the fundamental equity business within Goldman Sachs Asset Management, in a roundtable with reporters. Aligning portfolios with trends in innovation and disruption can provide investors with the potential for “enormous wealth creation,” she added.
In contrast, sticking with the traditional 60/40 stock/bond portfolio and the S&P 500, a “backward-looking” market cap-weighted benchmark that is heavily concentrated in 1% of its stocks, will fail to deliver the returns investors need to achieve their long-term savings goals, Koch said. The 60/40 portfolio, which has returned almost 10% on average over the last 10 years will likely return just 4%-5% over the next 10, she said.
Here’s a rundown of the three new ETFs:
GBUY invests in companies across any sector that are aligned with the priorities and spending habits of younger consumers, including their increased adoption of technology and different lifestyle preferences and values.