GSAM today announced the launch of GTIP, an exchange-traded fund (“ETF”) that seeks to offer smart beta exposure to treasury inflation-protected securities (“TIPS”). GTIP is competitively priced to investors at 12 basis points and is GSAM’s fourth Access fixed income ETF.1
“In an inflationary economic environment, GTIP provides investors with a potential hedge through its innovative screening approach to TIPS bonds,” said Michael Crinieri, GSAM’s Global Head of ETF Strategy. “The addition of GTIP further highlights the mission of our Access ETF lineup, providing investors with lower-cost bond funds.”
GTIP seeks to track the FTSE Goldman Sachs Treasury Inflation Protected USD Bond Index, owned and calculated by FTSE Fixed Income LLC (the “Index Provider” or “FTSE”) using concepts developed with GSAM. The Index uses a transparent, rules-based methodology, designed to measure the performance of bonds that meet certain liquidity and issuance criteria.
“TIPS present an attractive diversification opportunity for many investors with relatively low correlations to other major asset classes,” said Jason Singer, portfolio manager for GTIP. “We are excited to extend our Access ETF lineup and provide investors with a smarter, more systematic way to invest in the bond market.”
GTIP will be passively managed by GSAM’s Global Fixed Income team, whose deep market expertise and extensive resources will aid in trade execution and optimizing portfolio construction.2
“Our continued relationship with GSAM and the launch of their latest ETF showcase our focus on developing innovative indices that balance risk in a systematic manner,” said Jayni Kosoff, Managing Director, US FI Index Sales, FTSE Russell.
GSAM ETF Background
- GSAM started offering ETFs in September 2015 with the launch of the Goldman Sachs ActiveBeta® U.S. Large Cap Equity ETF (Ticker: GSLC). It now has 13 ETFs with over $10.0 billion in assets under management as of October 2, 2018.
- GSAM began offering fixed income ETFs in September 2016 with the launch of the Goldman Sachs Access Treasury 0-1 Year ETF (Ticker: GBIL).3 GSAM’s fixed income ETF suite now includes four funds.
- GSAM’s complete Access ETF suite is below:
|Fund Name||Ticker||List Date||Total Expense Ratio (basis points)|
|Goldman Sachs Access Treasury 0-1 Year ETF3||GBIL||9/8/16||12|
|Goldman Sachs Access Inflation Protected USD Bond ETF4||GTIP||10/4/18||12|
|Goldman Sachs Access Investment Grade Corporate Bond ETF5||GIGB||6/8/17||14|
|Goldman Sachs Access High Yield Corporate Bond ETF6|
GSAM is the asset management arm of The Goldman Sachs Group, Inc. (NYSE: GS), which supervises $1.30 trillion in assets as of 6/30/18.7 Goldman Sachs Asset Management has been providing discretionary investment advisory services since 1988 and has investment professionals in all major financial centers around the world. The company offers investment strategies across a broad range of asset classes to institutional and individual clients globally. Founded in 1869, Goldman Sachs is a leading global investment banking, securities and investment management firm that provides a wide range of financial services to a substantial and diversified client base that includes corporations, financial institutions, governments and high-net-worth individuals.
1 Source: GSAM and Morningstar as of September 30, 2018. The Goldman Sachs Access Inflation Protected USD Bond ETF expense ratio is 12 basis points (bps).The average net expense ratio for Inflation-Protected Bond ETFs in the Morningstar Inflation-Protected Bond category is 15 bps, and average mutual funds, I-Shares only, is 46 bps. Category expense ratios represent category averages for all funds in the Inflation-Protected Bond category as defined by Morningstar. In an effort to distinguish funds by what they own, as well as by their prospectus objectives and styles, Morningstar developed the Morningstar Categories. While the prospectus objective identifies a fund’s investment goals based on the wording in the fund prospectus, the Morningstar Category identifies funds based on their actual investment styles as measured by their underlying portfolio holdings (portfolio and other statistics over the past three years). Please note the figures shown above are the unitary management fees. Ordinary brokerage commissions apply. Brokerage commissions will reduce returns.
2 The team utilizes a representative sampling strategy to manage the Fund. “Representative sampling” is an indexing strategy in which the Fund invests in a representative sample of constituent securities that has a collective investment profile similar to that of the Index. The securities selected for investment by the Fund are expected to have, in the aggregate, investment characteristics, fundamental characteristics, and liquidity measures similar to those of the Index. The Fund may or may not hold all of the securities in the Index.
3 GBIL Total Annual Fund Operating Expenses (%): 0.12%. GBIL is not a money market fund and does not attempt to maintain a stable net asset value. The expense ratios of the Fund do not have a fee waiver and expense limitation. The Net and Gross expense ratios will be the same.
4 GTIP Total Annual Fund Operating Expenses (%): 0.12%.GTIP is not a money market fund and does not attempt to maintain a stable net asset value. The expense ratios of the Fund do not have a fee waiver and expense limitation. The Net and Gross expense ratios will be the same.
5 GIGB Total Annual Fund Operating Expenses (%): 0.14%. The expense ratios of the Fund do not have a fee waiver and expense limitation. The Net and Gross expense ratios will be the same.
6 GHYB Total Annual Fund Operating Expenses (%): 0.34%. The expense ratios of the Fund do not have a fee waiver and expense limitation. The Net and Gross expense ratios will be the same.
7 Assets Under Supervision (AUS) includes assets under management and other client assets for which Goldman Sachs does not have full discretion.
The Goldman Sachs Access Inflation Protected USD Bond ETF (the “Fund”) seeks to provide investment results that closely correspond, before fees and expenses, to the performance of the FTSE Goldman Sachs Treasury Inflation Protected USD Bond Index (the “Index”), which is designed to track the performance of inflation-protected, fixed rate U.S. Treasury Securities denominated in U.S. dollars that meet certain screening criteria. The Fund’s investments are subject to the risks associated with debt securities generally, including credit, liquidity, interest rate, call and extension risk. U.S. Treasury Inflation protected securities (“TIPS”) are fixed income securities issued by the U.S. Treasury whose interest and principal payments are periodically adjusted according to the rate of inflation. The value of TIPS generally fluctuates in response to inflationary concerns. Because the Fund may concentrate its investments in an industry or group of industries to the extent that the Index is concentrated, the Fund may be subject to greater risk of loss as a result of adverse economic, business or other developments affecting that industry or group of industries. The Fund is not actively managed, and therefore the Fund will not generally dispose of a security unless the security is removed from the Index. The Index calculation methodology may rely on information based on assumptions and estimates and neither the Fund nor its investment adviser can guarantee the accuracy of the methodology’s assessment of included issuers. Performance may vary substantially from the performance of the Index as a result of transaction costs, expenses and other factors.
Fund shares are not individually redeemable and are issued and redeemed by the Fund at their net asset value (“NAV”) only in large, specified blocks of shares called creation units. Shares otherwise can be bought and sold only through exchange trading at market price (not NAV). Shares may trade at a premium or discount to their NAV in the secondary market. Brokerage commissions will reduce returns.
The Investment Company Act of 1940 (the “Act”) imposes certain limits on investment companies purchasing or acquiring any security issued by another registered investment company. For these purposes the definition of “investment company” includes funds that are unregistered because they are excepted from the definition of investment company by sections 3(c)(1) and 3(c)(7) of the Act. You should consult your legal counsel for more information.
Diversification does not eliminate the risk of experiencing investment loss.
GTIP is newly organized and does not have an operating history. Certain funds are recently organized and do not have a substantial operating history.
Smart beta refers to quantitative index-based strategies. Transparency allows investors to view their portfolio holdings on a daily basis. Basis points (bps) are equal to .01% (or 1/100th) of a percent.
The Fund has been developed solely by GSAM. The Fund is not in any way connected to or sponsored, endorsed, sold or promoted by the London Stock Exchange Group plc and its group undertakings (collectively, the “LSE Group”). FTSE Russell is a trading name of certain of the LSE Group companies.
All rights in the Index vest in the relevant LSE Group company which owns the Index. FTSE® is a trade mark of the relevant LSE Group company and is used by any other LSE Group company under license.
The Index is calculated by or on behalf of FTSE Fixed Income, LLC or its affiliate, agent or partner. The LSE Group does not accept any liability whatsoever to any person arising out of (a) the use of, reliance on or any error in the Index or (b) investment in or operation of the Fund. The LSE Group makes no claim, prediction, warranty or representation either as to the results to be obtained from the Fund or the suitability of the Index for the purpose to which it is being put by GSAM.
“Goldman Sachs” is a trademark owned by Goldman Sachs and is registered in the US and other countries. The Goldman Sachs trademark is being used by FTSE Fixed Income under license from Goldman Sachs. With respect to the Index, Goldman Sachs and its affiliates are in no way related or connected to or affiliated with FTSE Fixed Income other than as a licensee. Goldman Sachs does not own, maintain or participate in the calculation of the Index. Neither Goldman Sachs, nor its affiliated companies make any representation or warranty, express or implied to any member of the public regarding the ability of the Index to track general market performance. Data and information contained herein regarding the Index is proprietary to FTSE Fixed Income or its licensors, and reproduction of such data and information is prohibited except with the prior written permission of FTSE Fixed Income.
Please note that one may not invest directly into an index.
ALPS Distributors, Inc. is the distributor of the Goldman Sachs ETFs. ALPS Distributors, Inc. is unaffiliated with Goldman Sachs Asset Management and FTSE Fixed Income LLC.
Please consider a Fund's objectives, risks, and charges and expenses, and read the summary prospectus, if available, and the Prospectus carefully before investing. A summary prospectus, if available, or a Prospectus for the Fund containing more information may be obtained from your authorized dealer or from Goldman Sachs & Co. LLC by calling (1-800-621-2550).
Compliance code: 144354-TMPL-10/2018-841630 Date of first use: 10/4/2018.
ALPS Control: GST 756 ED 10/4/2019.
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Patrick Scanlan Tel: 212-902-6164