Thematic Investing With Goldman Sachs: Episode 5 – GS Future Consumer Equity ETF (GBUY)

In the Thematic Investing series, Tom Lydon, CEO of ETF Trends and ETF Database, alongside experts and innovators from Goldman Sachs, sheds light on one of the most popular alternative investments, thematics, and how they can benefit advisors and investors. In the fifth episode of the series, Lydon is joined by Laura Destribats, portfolio manager at Goldman Sachs Asset Management, to discuss the Goldman Sachs Future Consumer Equity ETF (GBUY).

Destribats explains that Millennials and Gen Z combined are set to become the main global consumers as they become established in their workplaces and their earnings potential grows. With greater income comes higher levels of spending, and their spending habits are expected to be the primary drivers for growth for companies and industries looking ahead.

“What we’ve tried to do is to identify which are going to be the groups of companies that are going to benefit from this the most from a thematic perspective, and then within that identify the best companies to give our investors exposure to,” Destribats says.

Spending habits and interests are different for Millennials and Gen Z compared to previous generations because they have grown up exposed to the digital world. By investing in areas such as e-commerce, fintech, entertainment, and gaming, GBUY is able to capture these changing interests and habits of this powerful consumer population.

Younger generations also tend to prioritize their lives differently, valuing experiences over goods, and with a large focus on sustainability. Spending on luxury goods is something that spans all generations, however, particularly within Asian markets.

“We’re seeing Millennials have a very high propensity to spend, particularly actually if you look outside of your traditional markets; you look at Asia, we have a very strong growing middle class. A lot of those individuals are going to be buying luxury consumer goods for the first time,” Destribats explains.

GBUY is a fund that invests globally to capture the spending power of Millennials and Gen Z worldwide, with different areas of the world having different levels of online access and online spending. This can be seen particularly within e-commerce penetration, which is at approximately 20% in the U.S. but only 9%-10% for Latin America.

“If you think about the runway for growth today, it’s much longer in Latin America than it is even in the U.S.,” Destribats says. “Of course, we believe it’s going to grow everywhere, and so that opportunity set that you’re presented with as an investor can be quite different in industries for different reasons, and so thinking of it through that global lens, we think, is really meaningful.”

GBUY has three portfolio managers, two based in the U.S. and one in Hong Kong, and has over 80 fundamental equity investors around the world that contribute insights to the fund.

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