Goldman Sachs Expands ETF Lineup With Two More Smart Beta Funds

Goldman Sachs Group Inc. GS expanded its exchange traded funds lineup in a big way Friday, taking the size of that group to five from three with the introduction of the Goldman Sachs ActiveBeta Europe Equity ETF GSEU and the Goldman Sachs ActiveBeta Japan Equity ETF GSJY.

As was the case with Goldman's first three ETFs, each of which debuted in the third and fourth quarters of 2015, the Goldman Sachs ActiveBeta Japan Equity ETF and the Goldman Sachs ActiveBeta Europe Equity ETF came to market with solid institutional backing of $25 million apiece. Early commitments from institutional investors helped Goldman ETFs, such as the Goldman Sachs ActiveBeta U.S. Large Cap Equity ETF GSLC, some of the most successful ETFs to launch last year.

The Goldman Sachs ActiveBeta Europe Equity ETF is a diversified Europe so it offers exposure to countries in and outside of the Eurozone. GSEU allocates 28 percent of its weight to the U.K., 16.8 percent to France and 14.7 percent to Switzerland. Germany, the Eurozone's largest economy, is GSEUs fourth-largest country allocation at 12.7 percent.

GSEU follows the Goldman Sachs ActiveBeta Europe Equity Index, which “seeks to capture common sources of active equity returns, including value (i.e., the security’s price compared to market value), momentum (i.e., performance history), quality (i.e., profitability relative to total assets) and volatility (i.e., consistency of returns,” according to Goldman Sachs Asset Management.

Financial services stocks are GSEU's largest sector weight at 17.4 percent followed by consumer discretionary at 17 percent.

The Goldman Sachs ActiveBeta Japan Equity ETF devotes 21.6 percent of its weight to discretionary names and 16.5 percent to industrials. Familiar names in the new Japan ETF include Toyota Motor Corp. TM and Honda Motor Co. HM.

Both of Goldman's new ETFs charge 0.25 percent per year, or $25 for each $10,000 invested. Goldman also said it lowered the annual fee on the Goldman Sachs ActiveBeta International Equity ETF GSIE, which debuted in November, to 0.25 percent.

As of March 2, Goldman's first three ETFs had over $1 billion in combined assets under management.