Today, Goldman Sachs launched a new domestic equity exchange traded fund that promises to be the least expensive smart-beta offerings on the market today.
“This smart-beta ETF will be priced like traditional beta products,” said Michael Crinieri, Managing Director at Goldman Sachs.
Goldman Sachs ActiveBeta U.S. Large Cap Equity ETF (NYSEArca: GSLC), will have a 0.09% expense ratio, equal to the SPDR S&P 500 ETF (NYSEArca: SPY). The low expense ratio is quite surprising as most smart-beta index-based ETFs carry greater fees due to their customized nature.
There are 372 U.S.-listed equity ETFs that track non-market-capitalization-weighted indices, with an average expense ratio of 0.56%, according to XTF data. Enhanced large-cap ETFs have an average 0.49% expense ratio and enhanced small-cap/micro-cap ETFs have an average 0.55% expense ratio.
Goldman Sachs is crafting new ETFs in response to increased demand from clients for Goldman investment strategies in ETF form; especially among its institutional and insurance-based clients.
“Our clients are asking ‘Do you have this in an ETF wrapper?,’” said Steve Sachs, Head of Capital Markets at Goldman Sachs