Head of Capital Markets, Exchange Traded Products
Goldman Sachs Asset Management
What are some trends we can expect to see in the ETF market over the next year?
Really in the next year we think it’s probably going to be all about fixed income. You know, certainly for the broad ETF industry as a whole, and it’s certainly something that Goldman Sachs Asset Management (GSAM) is looking at as well. We just recently launched our first fixed income ETF product in the money market space, and we think ultimately, given the market environment, and given the need for fixed income products in the ETF wrapper, we think that’s where everybody’s going to be focused in the near term.
Where do you see opportunities in the market for strategic beta ETFs?
We think the opportunity just continues to develop in strategic beta or smart beta. We launched our smart beta suite, the Goldman Sachs Active Beta suite, last year here on the New York Stock Exchange.
We think the opportunity in strategic beta or smart beta really just continues to grow. And we think, specifically it’s the multi-factor approaches – approaches that we’ve taken in our product suite as well as others. We think it’s the natural evolution of smart beta to transition from individual factor exposures to multi-factor exposures that are multi-factor strategies that allow investors to use them as core holdings in their portfolios.
What has led to the success and growth of the GSAM's ETF suite as you celebrate your one year anniversary?
We think it’s a couple of things. Certainly the strategies themselves have resonated with investors. GSAM is known for quantitative stock selection methodologies and strategies, so that active beta suite of products was really in our core skill set.
The other real big factor is cost. We actually decided to take cost out of the equation by pricing our active beta suite really in line, or in many cases, cheaper than cap-weighted or just traditional beta.
If you look at, for example GSLC, our U.S. Large Cap product, priced at 9 basis points versus the industry average in smart beta being 38 basis points, it really has been a driver of our growth and it’s really resonated with investors.
How do you think GSAM will continue to grow in the ETF market?
I think we’re going to continue to focus on what we’re good at. When you think about the active beta strategies that we launched, when you think about the treasury money market ETF that we launched, we’re going to continue to focus on Goldman Sachs strengths from an investment management perspective, we’re also going to continue to listen to our clients.
One of the reasons that we think we’ve been successful so far is we launch strategies that our clients had asked us to launch…and that had already resonated with the client base.
We’ll continue to focus on that as we continue to grow the business.
How does it feel to be on the floor of the New York Stock Exchange after ringing the closing bell with your colleagues?
So you know what? I love it! Every time that I come to the floor, I have that same excited feeling! It never gets old for me. It’s one of those things that I think generally everybody should experience. And we’re very lucky, particularly in this industry, that we get the opportunity to partner with someone like the NYSE and actually get to experience this on a somewhat regular basis.