Goldman Sachs Asset Management has come out with a Treasury inflation-protected securities, or TIPS, related ETF that incorporates a rules-based or smart beta selection methodology.
On Thursday, GSAM launched the Goldman Sachs Access Inflation Protected USD Bond ETF (Cboe: GTIP), which has a 0.12% expense ratio.
“In an inflationary economic environment, GTIP provides investors with a potential hedge through its innovative screening approach to TIPS bonds,” Michael Crinieri, GSAM’s Global Head of ETF Strategy, said in a note. “The addition of GTIP further highlights the mission of our Access ETF lineup, providing investors with lower-cost bond funds.”
The Goldman Sachs Access Inflation Protected USD Bond ETF tries to reflect the performance of the FTSE Goldman Sachs Treasury Inflation Protected USD Bond Index, which is comprised of inflation-protected, fixed rate U.S. Treasury Securities denominated in U.S. dollars, according to the fund prospectus.
Fixed-rate, sovereign bonds
The underlying index screens includes fixed-rate, sovereign bonds denominated in USD that are linked to an inflation index. Only TIPS that have a minimum of 1 year to maturity and a minimum issue size of $5 billion outstanding are included.
The index also excludes securities that are unseasoned or “on-the-run” bonds, the newest issues for each security term. It also weight each constituent to match the weighted average real yield duration of the universe of securities.
“TIPS present an attractive diversification opportunity for many investors with relatively low correlations to other major asset classes,” Jason Singer, portfolio manager for GTIP, said in a note. “We are excited to extend our Access ETF lineup and provide investors with a smarter, more systematic way to invest in the bond market.”
GTIP is the latest in Goldman Sachs’ line of smart beta and fixed-income ETF strategies. The money manager now has 13 ETF options with over $10 billion in assets under management.
“Our ETF franchise surpassing $10bn in assets under management represents a key milestone in our business. This achievement comes just 3 years after the launch of our first ETF, GSLC. Our success is a direct result of the strong partnerships, focus and hard work across the organization. We look forward to the continued growth of the franchise,” Crineri said in an email.
For more information on new fund products, visit our new ETFs category.