December 15th, 2015

Goldman Sachs Asset Management Announces Zero Capital Gains Distributions for its ActiveBeta® Exchange Traded Funds

Goldman Sachs Asset Management (“GSAM”) today announced that there will be zero capital gains distributions in 2015 in their series of ActiveBeta® Exchange-Traded Funds (“ETFs”).

Since the listing of its first ETF on September 21, 2015, GSAM has launched a total of three ETFs that seek to track the Goldman Sachs ActiveBeta® U.S. Large Cap Equity Index, the Goldman Sachs ActiveBeta® Emerging Markets Equity Index and the Goldman Sachs ActiveBeta® International Equity Index, respectively, each of which utilizes a proprietary, performance-seeking methodology that delivers the potential to outperform the market:

  • The Goldman Sachs ActiveBeta® U.S Large Cap Equity ETF (Ticker: GSLC)
  • The Goldman Sachs ActiveBeta® Emerging Markets Equity ETF (Ticker: GEM)
  • The Goldman Sachs ActiveBeta® International Equity ETF (Ticker: GSIE)

“Our ActiveBeta® products are designed to offer investors the advantages of traditional exchange-traded funds1, such as a defined strategy, diversified exposure to stocks and low costs, with the additional opportunity to outperform the market,” said Michael Crinieri, Global Head of ETF Strategies at GSAM. “We are dedicated to providing unique, cost-efficient2 investment solutions to our clients.”

Each ActiveBeta® Index weights stocks based on four well-established attributes of performance:

1. Value — The index identifies stocks from companies that may be undervalued by the rest of the market. This can help investors to gain exposure to high potential stocks that others may have overlooked.

2. Momentum — The index identifies stocks with prices that have been growing. This allows investors to participate in market trends.

3. Quality — The index identifies stocks from companies that demonstrate sustainable profitability over time. This enables investors to gain exposure to companies with strong fundamentals and potential for consistent returns.

4. Low volatility — The index identifies stocks from companies that are likely to avoid extreme price swings. This aims to smooth out the ride, so investors can stay invested for the long term.

Since it began trading on September 21, 2015, GSLC has grown to over $202 million in assets. Since it began trading on September 29, 2015, GEM has grown to over $540 million in assets. Since it began trading on November 10, 2015, GSIE has grown to over $33 million in assets, all as of December 14, 2015. On November 30, 2015, GSLC had its single highest trading volume to date of 1,468,730 shares3.

GSAM is the asset management arm of The Goldman Sachs Group, Inc. (NYSE:GS), which supervises $1.19 trillion in assets as of November 11, 20154. Goldman Sachs Asset Management has been providing discretionary investment advisory services since 1988 and has investment professionals in all major financial centers around the world. The company offers investment strategies across a broad range of asset classes to institutional and individual clients globally. Founded in 1869, Goldman Sachs is a leading global investment banking, securities and investment management firm that provides a wide range of financial services to a substantial and diversified client base that includes corporations, financial institutions, governments and high-net-worth individuals.

1Traditional ETFs refer to market-cap weighted strategies designed to track a given market or index, and offer benefits such as a defined strategy, diversified exposure to stocks and low costs.

2 ActiveBeta® ETFs use a passive investing strategy like traditional ETFs to keep costs competitive.
The Goldman Sachs ActiveBeta® US Large Cap Equity ETF is priced competitively at 9 basis points (bps) based on a universe of funds that include traditional market cap-weighted ETFs and smart beta ETFs. For example, the fee for the largest ETF by AUM, the SPDR S&P 500 ETF Trust (SPY), is priced at 9 bps. Additionally, the average fund fee for the Morningstar US ETF Large Blend Category is 36 bps, and the average fund fee for the Morningstar US ETF Large Blend Strategic Beta Classification is 38 bps. “Smart beta” refers to quantitative index-based strategies. Source: Morningstar, as of November 11, 2015. The Goldman Sachs ActiveBeta® Emerging Markets Equity ETF is priced at 45 basis points (bps) (after expense limitation). GEM is 34% lower cost than the most liquid Emerging Market Equity ETF by volume, and more than 22% lower in cost relative to the Morningstar Diversified Emerging Markets category Strategic Beta average, as of September 29, 2015. This is based on Morningstar’s definition of Strategic Beta as well as Morningstar’s definition of the Multi-factor Strategic Beta Attribute as of September 29, 2015. The Goldman Sachs ActiveBeta® International Equity ETF is priced at 35 basis points (bps) (after expense limitation). GSIE’s expense ratio is 26% lower cost than the Strategic Beta average in the Foreign Large Blend Morningstar Category and 13% lower than the Index Fund average in the category, as of October 2, 2015. This is based on Morningstar’s definition of Strategic Beta as well as Morningstar’s definition of the Multi-factor Strategic Beta Attribute as of October 2, 2015. This data only includes ETFs.

3 Source: Bloomberg

4 Assets Under Supervision (AUS) includes assets under management and other client assets for which Goldman Sachs does not have full discretion.
Ordinary brokerage commissions apply. Brokerage commissions will reduce returns.

ActiveBeta® is a registered trademark of GSAM and has been licensed for use by Goldman Sachs ETF Trust. The ActiveBeta® Portfolio Construction and Maintenance Methodology is the patent-protected property of GSAM (U.S. Patent Numbers 8,285,620 and 8,473,398).

Fund Risk Considerations

Goldman Sachs ActiveBeta® International Equity ETF

The Goldman Sachs ActiveBeta® International Equity ETF(the “Fund”) seeks to provide investment results that closely correspond, before fees and expenses, to the performance of the Goldman Sachs ActiveBeta® International Equity Index (the “Index”), which delivers exposure to equity securities of developed markets issuers outside of the United States. The Fund’s equity investments are subject to market risk, which means that the value of the securities in which it invests may go up or down in response to the prospects of individual companies, particular sectors and/or general economic conditions. Foreign investments may be more volatile and less liquid than investments in U.S. securities and are subject to the risks of currency fluctuations and adverse economic or political developments. Because the Fund may concentrate its investments in an industry or group of industries to the extent that the Index is concentrated, the Fund may be subject to greater risk of loss as a result of adverse economic, business or other developments affecting that industry or group of industries. The securities of mid- and small-capitalization companies involve greater risks than those associated with larger, more established companies and may be subject to more abrupt or erratic price movements. The Fund is not actively managed, and therefore the Fund will not generally dispose of a security unless the security is removed from the Index. The Index calculation methodology may rely on information based on assumptions and estimates and neither the Fund nor its investment adviser can guarantee the accuracy of the methodology’s assessment of included issuers. Performance may vary substantially from the performance of the Index as a result of transaction costs, expenses and other factors.

Goldman Sachs ActiveBeta® Emerging Markets Equity ETF

The Goldman Sachs ActiveBeta® Emerging Markets Equity ETF (the “Fund”) seeks to provide investment results that closely correspond, before fees and expenses, to the performance of the Goldman Sachs ActiveBeta® Emerging Markets Equity Index (the “Index”), which delivers exposure to equity securities of emerging market issuers. The Fund’s equity investments are subject to market risk, which means that the value of the securities in which it invests may go up or down in response to the prospects of individual companies, particular sectors and/or general economic conditions. Foreign and emerging markets investments may be more volatile and less liquid than investments in U.S. securities and are subject to the risks of currency fluctuations and adverse economic or political developments. Because the Fund may concentrate its investments in an industry or group of industries to the extent that the Index is concentrated, the Fund may be subject to greater risk of loss as a result of adverse economic, business or other developments affecting that industry or group of industries. The securities of mid- and small-capitalization companies involve greater risks than those associated with larger, more established companies and may be subject to more abrupt or erratic price movements. The Fund effects creation and redemption transactions partially for cash, which means an investment in the Fund may be less tax-efficient than an investment in a conventional exchange-traded fund. The Fund is not actively managed, and therefore the Fund will not generally dispose of a security unless the security is removed from the Index. The Index calculation methodology may rely on information based on assumptions and estimates and neither the Fund nor its investment adviser can guarantee the accuracy of the methodology’s assessment of included issuers. Performance may vary substantially from the performance of the Index as a result of transaction costs, expenses and other factors.

Goldman Sachs ActiveBeta® U.S. Large Cap Equity ETF

The Goldman Sachs ActiveBeta® U.S. Large Cap Equity ETF (the “Fund”) seeks to provide investment results that closely correspond, before fees and expenses, to the performance of the Goldman Sachs ActiveBeta® U.S. Large Cap Equity Index (the “Index”), which delivers exposure to equity securities of large-capitalization U.S. issuers. The Fund’s equity investments are subject to market risk, which means that the value of the securities in which it invests may go up or down in response to the prospects of individual companies, particular sectors and/or general economic conditions. Because the Fund may concentrate its investments in an industry or group of industries to the extent that the Index is concentrated, the Fund may be subject to greater risk of loss as a result of adverse economic, business or other developments affecting that industry or group of industries. The Fund is not actively managed, and therefore the Fund will not generally dispose of a security unless the security is removed from the Index. The Index calculation methodology may rely on information based on assumptions and estimates and neither the Fund nor its investment adviser can guarantee the accuracy of the methodology’s assessment of included issuers. Performance may vary substantially from the performance of the Index as a result of transaction costs, expenses and other factors

Shares of each fund are not individually redeemable and are issued and redeemed by the Fund at their net asset value (“NAV”) only in large, specified blocks of shares called creation units. Shares otherwise can be bought and sold only through exchange trading at market price (not NAV). Shares may trade at a premium or discount to their NAV in the secondary market. Brokerage commissions will reduce returns.

Each Fund is recently or newly organized and has limited or no operating history.

Investors can lose money by investing in the Funds. For additional risk considerations, please see the above disclosures.

The Goldman Sachs ActiveBeta® International Equity Index (“the Index”) is designed to deliver exposure to equity securities of developed markets issuers outside the United States. The Index is constructed using the patented ActiveBeta® Portfolio Construction Methodology, which was developed to provide exposure to the “factors” (or characteristics) that are commonly tied to a stock’s outperformance relative to market returns. These factors include value (i.e., how attractively a stock is priced relative to its “fundamentals,” such as book value and free cash flow), momentum (i.e., whether a company’s share price is trending up or down), quality (i.e., profitability) and low volatility (i.e., a relatively low degree of fluctuation in a company’s share price over time). Given the Fund’s investment objective of attempting to track its Index, the Fund does not follow traditional methods of active investment management, which may involve buying and selling securities based upon analysis of economic and market factors.

The Goldman Sachs ActiveBeta® Emerging Markets Equity Index (“the Index”) is designed to deliver exposure to equity securities of emerging market issuers. The Index is constructed using the patented ActiveBeta® Portfolio Construction Methodology, which was developed to provide exposure to the “factors” (or characteristics) that are commonly tied to a stock’s outperformance relative to market returns. These factors include value (i.e., how attractively a stock is priced relative to its “fundamentals,” such as book value and free cash flow), momentum (i.e., whether a company’s share price is trending up or down), quality (i.e., profitability) and low volatility (i.e., a relatively low degree of fluctuation in a company’s share price over time). Given the Fund’s investment objective of attempting to track its Index, the Fund does not follow traditional methods of active investment management, which may involve buying and selling securities based upon analysis of economic and market factors.

The Goldman Sachs ActiveBeta® U.S. Large Cap Equity Index (“the Index”) is designed to deliver exposure to equity securities of large capitalization U.S. issuers. The Index is constructed using the patented ActiveBeta® Portfolio Construction Methodology, which was developed to provide exposure to the “factors” (or characteristics) that are commonly tied to a stock’s outperformance relative to market returns. These factors include value (i.e., how attractively a stock is priced relative to its “fundamentals,” such as book value and free cash flow), momentum (i.e., whether a company’s share price is trending up or down), quality (i.e., profitability) and low volatility (i.e., a relatively low degree of fluctuation in a company’s share price over time). Given the Fund’s investment objective of attempting to track its Index, the Fund does not follow traditional methods of active investment management, which may involve buying and selling securities based upon analysis of economic and market factors.

Please note that one may not invest directly into an index.

ALPS Distributors, Inc. is the distributor of the Goldman Sachs ETFs.
ALPS Distributors, Inc. is unaffiliated with Goldman Sachs Asset Management.

Please consider a Fund's objectives, risks, and charges and expenses, and read the summary prospectus, if available, and the Prospectus carefully before investing. A summary prospectus, if available, or a Prospectus for the Fund containing more information may be obtained from your authorized dealer or from Goldman, Sachs & Co. by calling (1-800-621-2550).

Compliance code: 23698.OTU
Date of first use: 12/15/15
ALPS Control: GST 162
© 2015 Goldman Sachs. All rights reserved.

Contacts:

Media:
Andrew Williams, 212-902-5400
Hillary Yaffe, 212-279-3115

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