Goldman Sachs's (NYSE: GS) Asset Management arm announced the launch of the Goldman Sachs Future Planet Equity ETF (NYSE: GSFP) on Thursday, the firm's first transparent, actively managed equity exchange-traded fund. The new fund is hoping to stand out in the expanding environmental, social and governance (ESG) investing market by providing exposure to global companies of all sizes and not being based on an index.
"Rapid change is disrupting the status quo across industries and around the world. We believe we are on the cusp of a sustainability revolution that could have the scale of the industrial revolution and the speed of the digital revolution," said Katie Koch, co-head of the Fundamental Equity business within Goldman Sachs Asset Management, in a press statement. "In our view, this may give rise to a unique wealth creation opportunity for investors over the next decade."
Koch says that GSFP will invest in companies that are "on the right side of the climate transition," meaning they are actively adapting their business models and strategies to benefit from a more sustainable future.
The fund is structured to invest in companies that "seek to provide solutions to environmental problems" within five key theme: clean energy, resource efficiency, sustainable consumption, the circular economy, and water sustainability. GSFP will also actively select companies with the potential to drive more sustainable business practices and deliver strong returns across an array of sectors, geographies, and market capitalizations.
"We believe we're at a key inflection point: for the first time ever, governments, corporates and consumers are all aligned in driving a global sustainability revolution, but the scale of the challenge is so large that a holistic approach is necessary," said Alexis Deladerrière, portfolio manager of GSFP and head of international developed equity markets for Goldman Sachs Asset Management's Fundamental Equity team, in a press statement. "GSFP will seek to invest in companies providing solutions to a variety of environmental challenges that are critical to supporting our planet for future generations."
While the ESG ETF field is becoming overpopulated, especially with U.S. large-cap ETF offered by big names like BlackRock (NYSE: BLK) and Vanguard, Goldman's global, all-cap focus helps the ETF stand out from competitors that typically hold large amounts of tech stocks like Apple (NASDAQ: AAPL), Facebook (NASDAQ: FB) and Microsoft (NASDAQ: MSFT), Koch told MarketWatch.
Instead, GSFP's top five holdings are Enel SpA (OTC) ENLY), Ecolab (NYSE: ECL), Daikin Industries (OTC: DKILY), Xylem (NYSE: XYL), and Ball (NYSE: BLL), and its top three sectors are Industrials (NYSE: XLI), Materials (NYSE: XLB), and Information Technology (NYSE: XLK); the fund offerings a different angle for global ESG ETF investing with the benefit of transparency and active management.
GSFP has an expense ratio of 0.75% and offers a concentrated portfolio of 40 to 60 companies at a time.