Alternative Investments/ESG: Goldman Sachs Launches Active, Climate-Focused ETF

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A key inflection point: Governments, corporates and consumers are all aligned in driving a global sustainability revolution.

Goldman Sachs (NYSE: GS) has launched its first actively managed, transparent ETF that extends its range of thematic funds. The Goldman Sachs Future Planet Equity ETF will invest in companies that seek to provide solutions to environmental problems aligned with five key themes: clean energy, resource efficiency, sustainable consumption, the circular economy and water sustainability. (Goldman Sachs Asset Management)

Goldman Sachs Future Planet Equity ETF

“Rapid change is disrupting the status quo across industries and around the world.  We believe we are on the cusp of a sustainability revolution that could have the scale of the industrial revolution and the speed of the digital revolution. In our view, this may give rise to a unique wealth creation opportunity for investors over the next decade,” said Katie Koch, co-head of the Fundamental Equity business within Goldman Sachs Asset Management (GSAM).  “The Fund will invest in companies that are on the right side of the climate transition and have a positive impact on our future planet.”

Goldman Sachs will also invest some of its own capital in the fund, which has an expense ratio of 0.75%.

“We believe we’re at a key inflection point: for the first time ever, governments, corporates and consumers are all aligned in driving a global sustainability revolution, but the scale of the challenge is so large that a holistic approach is necessary,” said Alexis Deladerrière, portfolio manager of GSFP and head of international developed equity markets for GSAM’s Fundamental Equity team. “GSFP will seek to invest in companies providing solutions to a variety of environmental challenges that are critical to supporting our planet for future generations.”

Deladerrière told MarketWatch that the fund had an all-cap approach, and that 20% of the strategy will be invested in companies with under a $10 billion market cap. These mid-cap and small-cap firms are more likely to come up with innovative climate solutions, he said.

“This is why we want to be all-cap. These are global problems that are being addressed by all companies around the world, and we want to be able to access innovation.”

Fund management

“By combining the expertise of our fundamental equity investors with the benefits of the ETF wrapper, we are able to provide our clients with an innovative, tax-efficient investment solution,” said Mike Crinieri, global head of ETFs within Goldman Sachs Asset Management.  “ETFs seek to provide greater tax efficiency, transparency and trading flexibility than traditional mutual funds.”

The ETF will trade on the NYSE Arca exchange.

Related Story:  Goldman Sachs Offers Proxy Exposure To Cryptos Via “ETF-Linked” Notes

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