Goldman Sachs Asset Management has launched three new actively managed thematic ETFs to add to their suite of funds focused on innovation and disruption: the Goldman Sachs Future Consumer Equity ETF, the Goldman Sachs Future Health Care Equity ETF, and the Goldman Sachs Future Real Estate and Infrastructure Equity ETF.
The funds are all forward-looking and anticipate growth and opportunity within various industries that are poised for continued innovation.
Returns for the traditional 60/40 funds are anticipated to diminish in the coming years, explained Katie Koch, co-head of the fundamental equity business within Goldman Sachs. “As a result, we believe investors need to think differently about their portfolios and, in our view, aligning your portfolio with key secular growth trends presents a unique wealth creation opportunity,” Koch said.
“We think it’s important for investors to position themselves on the right side of innovation and disruption,” Koch explained in a meeting that discussed the fund launch yesterday. Each fund focuses on a different area of innovation and is aligned on the right side of disruption going forward.
GBUY focuses on the power of the younger generation as consumers, specifically on millennials and Gen Z. Marissa Ansell, a client portfolio manager, described these generations as the “most powerful consumers” that are leveraging technology and have different values and preferences that are reflected in how they spend money.
For this subset of younger consumers, priorities within spending habits are trending differently from previous generations, and GBUY is positioned to capture that. The fund is one that invests globally across all market caps, an important recognition of the spending force both within and outside of the U.S.; currently, 85% of these younger consumers live in emerging markets, Ansell explained.
GDOC recognizes the innovation and disruption that are happening within the healthcare industry, currently and continuing forward. “Technological advancements over the last few years have driven an unprecedented amount of innovation in the space,” explained Jenny Chang, portfolio manager of GDOC.
GDOC invests in all areas of healthcare, not just genomics and biotechnologies; this includes precision medicine, procedures that are technologically enabled, and digital healthcare. Goldman Sachs believes that the healthcare industry is at an inflection point, with innovation continuing to bring down the cost curves, and they seek to invest in the companies driving that innovation with this fund. GDOC invests globally and across all market caps.
GREI is a fund that invests across real estate and infrastructure companies that are on the right side of disruption. The fund seeks to invest in companies that are in line with any of five key components: innovation, demographic shifts, experiences over things, environmental sustainability, and social sustainability.
Both sectors are going to be beneficiaries of inflation and the infrastructure bill, explained Kristen Kuney, portfolio manager of GREI. Kuney went on to explain that this is a fund that capitalizes on innovation expansion in other fields because companies like biotech firms and cell tower makers are both going to need physical real estate for their growth. Both sectors offer investors exposure to relative predictable growth, lower volatility than the broader equity market, low correlations to other asset classes, and the opportunity to access secular growth through a complementary approach.
All three funds are actively managed and carry a 0.75% expense ratio.
“The pace of disruption is accelerating and we want to help our clients position their portfolios on the right side of that disruption,” said Julian Salisbury, global head of Goldman Sachs Asset Management. “These Funds expand our suite of actively managed thematic ETFs and provide focused exposure to key secular growth trends that we are seeing across industries.”
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