A dizzying number of exchange traded funds offer investors access to disruptive, innovative, and secular growth equities. The thing is, this universe evolves rapidly.
Enter the Goldman Sachs Future Planet Equity ETF (GSFP). GSFP, which debuted last month, is the first active equity-based ETFs in the Goldman Sachs stable and it’s appropriate at a time when so many investors are craving disruptive strategies.
“We draw on a deep bench of 80+ experienced investors around the world and conduct active, bottom-up security selection to identify companies that we believe can address environmental problems across clean energy, resource efficiency, sustainable consumption, the circular economy and water sustainability,” according to Goldman Sachs Asset Management (GSAM).
GSFP could prove to be a well-timed rookie ETF because investor enthusiasm for climate-focused and planet-friendly strategies is increasing, but many of the funds in this category are passively managed. Over the years, that’s served investors well, but passive climate-focused ETFs are usually heavy on wind and solar stocks and many aren’t nimble enough to react to disruption in what is becoming a fast-evolving landscape.
Another benefit of GSFP is that while it holds just 51 stocks – a somewhat concentrated lineup – it’s geographically, sector, and thematically diverse.
“Governments, corporates and consumers are aligned in driving a global sustainability revolution. Yet the scale of the challenge is so large that a holistic approach is necessary, with solutions to reduce greenhouse gas emissions required across many different activities,” adds GSAM.
GSFP allocates about 58% of its combined weight to industrial and materials stocks, the latter of which is something of a rarity in many old-guard climate funds. Adding a growth feel to the mix, the new ETF has a 20% weight to technology equities.
GSFP is also globally diverse as it features exposure to 18 countries. Typically, many funds in this category are Europe- and U.S.-heavy. Four of GSFP’s country exposures are in the Asia-Pacific region.
Lastly, the fund is thematically diverse.
“The Fund intends to invest in companies that seek to provide solutions to environmental problems aligned with five key themes: clean energy, resource efficiency, sustainable consumption, the circular economy and water sustainability. GSFP will conduct active, bottom-up security selection to target companies with the potential to drive more sustainable practices and deliver strong returns across various sectors, geographies and market capitalizations,” according to a GSAM statement.
For more news and information, visit the Future ETFs Channel.
The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.