New Goldman ETF tracks
popular hedge fund stock bets
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[November 03, 2016]
By Olivia Oran
Sachs Group Inc has launched a new exchange traded fund that mimics the
most popular stock bets made by hedge funds, the bank said on Thursday.
The Goldman Sachs Hedge Industry VIP ETF (GVIP) will provide exposure to
the 50 U.S. stocks that appear most frequently as top holdings in hedge
fund's quarterly 13F filings. It is the seventh ETF Goldman has launched
since September 2015.
The new ETF is based on a popular research report put out by Goldman
analysts Ben Snider and David Kostin in the Wall Street bank's research
division. As of August, holdings in the VIP index included Amazon.com
Inc, LinkedIn Corp and Citigroup Inc, according to the bank's research.
ETFs, which allow investors to gain exposure to a particular group of
companies or indexes, have increased in popularity in recent years
because of their low costs and transparency.
Other ETFs like the Global X GURU Index ETF and Alphaclone Alternative
Alpha ETF also try to beat the market by copying hedge fund managers'
Hedge-fund tracker ETFs are different than so-called liquid alternatives
funds, which try to replicate broader trading strategies used by hedge
funds. Both types of products are marketed to Main Street investors.
With its launch of new ETFs, Goldman is entering a highly competitive $3
trillion global market in which BlackRock Inc, State Street Corp and
Vanguard Group together account for about 70 percent of total assets
Goldman is trying to make inroads with lower prices.
The GS Hedge Industry VIP ETF is priced at 45 basis points, meaning
investors will pay $45 in annual fees for every $10,000 invested.
Similar funds examined by Reuters charged 65 to 95 basis points.
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A sign is displayed in the reception of Goldman Sachs in Sydney,
Australia, May 18, 2016. REUTERS/David Gray/File Photo
Goldman has also launched ETFs tied to international stocks broadly, as
well as emerging markets, Europe and Japan. It had accumulated $2.5
billion in assets as of Sept. 30.
The bank is introducing new products to grow revenue because new
regulations have hurt growth in traditional profit centers, like
Goldman's investment management division, which houses ETFs, said its
assets under supervision had grown to a record $1.35 trillion in the
third quarter. Net inflows were $14 billion, which was notable as many
active managers over the past year have seen outflows among a shift to
(Reporting by Olivia Oran in New York; Additional reporting by Trevor
Hunnicutt; Editing by Lauren Tara LaCapra and Andrew Hay)
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