Goldman Sachs Looks To Enter ETF Industry

by on December 28, 2009 | ETFs Mentioned:

Goldman Sachs has filed for approval with the Securities and Exchange Commission to launch a line of exchange-traded funds, seeking to become the latest financial giant to into the industry. According to the 40-APP filing, Goldman’s initial fund will “offer an extensive representation of the Brazilian, Indian, Chinese and Korean markets by targeting all companies with a market capitalization within the top 85% of their investable equity universe.” Goldman estimates that the fund would consist of approximately 300 to 450 constituents.

Goldman Sachs Tower In New JerseyThe filing requests relief to launch a variety of funds, including equity, fixed income, and blended portfolios, but details only traditional passively-indexed ETFs, a mild surprise given Goldman’s expertise in the field of active management.

Goldman already offers the GS Connect S&P GSCI Enhanced Commodity Total Return Strategy Index Exchange-Traded Note (GSC), which has accumulated more than $50 million in assets since its launch two-plus years ago. GSC is linked to a diversified index composed of about 25 individual commodities. The benchmark is dominated by energy commodities (70%), with additional weightings to agriculture (14%), industrial metals (8.2%), livestock (4%), and precious metals (3%).

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The company’s recent filing seemingly indicates that the financial giant is looking to significantly expand its ETF presence. The last several months have seen a handful of major players in the financial services expand their product offerings into the ETF arena. Bond giant PIMCO launched its first bond fund in June, and now has nine funds with aggregate assets of more than $450 million. In November, Charles Schwab joined the game, launching four low-cost ETFs. Schwab’s entrance has been equally impressive, as the company now has six ETFs with aggregate assets of about $300 million. Old Mutual also launched its first fund, while T. Rowe Price filed for approval on a line of actively-managed funds.

BlackRock and Guggenheim have also made pushes into the space in 2009 through acquisitions, snapping up the iShares and Claymore product lines, respectively.

Disclosure: No positions at time of writing.