Alternative Investments/Real Estate: Goldman Sachs Rolls Out Sustainable Real Estate ETF

The fund manager launches a trio of new ETFs aimed at disruptive investing; one of them is themed on sustainable real estate and infrastructure.

Goldman Sachs Asset Management (GSAM) launched this week the Goldman Sachs Future Consumer Equity ETF (NYSEARCA: GBUY), the Goldman Sachs Future Health Care Equity ETF (NYSEARCA: GDOC) and the Goldman Sachs Future Real Estate and Infrastructure Equity ETF (NYSEARCA: GREI). (Nasdaq)

Goldman Sachs Future Real Estate and Infrastructure Equity ETF (NYSEARCA: GREI)

All the three ETFs charge a 0.75% fee and are equity-oriented.

“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 GSAM, in a fund launch meeting with reporters. “Aligning portfolios with trends in innovation and disruption can provide investors with the potential for enormous wealth creation,” she added.

The Future Real Estate and Infrastructure Equity ETF will hold companies in the real estate and infrastructure sectors that are aligned with trends in innovation, demographic shifts and environmental and social sustainability.

According to Goldman Sachs portfolio manager Abhinav Zuthshi, in a measure of the changes in generational tastes, millennials tend to enjoy five trips annually that involve hotels and transportation – this is 30% more than the previous generation.

Furthermore, in a sign of a demographic shift, an aging population creates the need for more senior housing and health care infrastructure.

Other attractive sectoral features of real estate and infrastructure include 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.

Investors should note that this is an exposure different from the traditional 60% stocks and 40% bonds – which in the words of Koch is “very broken,” and expected to underperform compared to the previous decade.

Related Story: Bloomberg and Goldman Sachs Create New Clean Energy Index

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