Goldman Sachs Asset Management has launched three new actively managed, thematic exchange-traded funds meant to take advantage of disruptions in the medical, real estate and consumer sectors.
The three funds include the Goldman Sachs Future Consumer ETF (whose ticker symbol is GBUY); the Goldman Sachs Future Health Care Equity ETF (GDOC); and the Goldman Sachs Future Real Estate and Infrastructure Equity ETF (GREI).
The GBUY fund looks for those companies taking advantage of retail trends among younger consumers—especially the way they use technology and seek experiences through travel.
The health fund looks to companies on top of rapidly advancing trends in healthcare technology, including new devices and advances in genomics. “Unlike traditional healthcare sector funds, GDOC will focus on companies driving innovation,” said Goldman Sachs in the press release announcing the new funds.
The real estate and infrastructure fund will invest in companies that are working in sustainable infrastructure and gaining leverage from shifting trends in the way people work and live.
Katie Koch, co-head of the fundamental equity business at Goldman Sachs Asset Management, said the funds reflect the firm’s sentiment that passive indexes aren’t going to see the same success in the next decade that they did in the last—that a 60/40 portfolio that returned 10% over the last 10 years might return less than half that over the next 10.
“The standard market capitalization benchmark, the S&P 500, by definition is backward-looking,” Koch said in a webinar Goldman Sachs hosted yesterday. The benchmark is also crowded, she said, noting as other sources have that the top five companies in the S&P 500 make up more than 20% of the weight, and this, on top of the disruption the index has faced in the last 20 years, suggest that the same names aren’t going to have the same fire they gave investors in the past. “If we looked at the top companies in the U.S., the top 500 companies in the U.S. 30 years ago, and then we looked at them today, half of those companies no longer exist. … If you look at today’s top 10 companies, two didn’t exist 20 years ago, and another three of them weren’t yet public.”
Marissa Ansell, a client portfolio manager on the fundamental equity team, said that the new GBUY fund is based on the idea that millennials and Gen Z are going to be the most disruptive consumers. The fund looks at those companies that will take advantage of millennials’ consumer habits around the world.
“As the first generation of digital natives, they’ve grown up with technology at their fingertips. They’re very comfortable and used to leveraging technology in everything that they do,” said Ansell at the web conference. “We’ve also seen that different things matter to them. For example, they prioritize experiences. They care more about health and wellness. And they’re interested in environmental issues and sustainability.”
The fund focuses on companies aligned with two key themes, she said: tech-enabled consumption and lifestyle, and the companies set to surf on that shift are the ones in e-commerce, gaming and streaming.