Market Overview

Good Fee News On Goldman ETFs

Good Fee News On Goldman ETFs

Goldman Sachs Group Inc (NYSE: GS)'s Goldman Sachs Asset Management (GSAM) was a late entrant to the exchange-traded funds industry, bringing its first ETF to market in September. However, GSAM rapidly made its presence felt on at least two fronts: Prolific asset-gathering acumen and lower-than-average fees on strategic beta funds.

On the second point, New York-based Goldman said in a statement out Monday that, effective May 1, it is implementing a unitary management fee structure on its four ETFs. Under that new structure, GSAM will pay nearly all the expenses associated with its ETFs while investors will still pay the annual fees.

Active Beta ETFs' Success

The Goldman Sachs ActiveBeta U.S. Large Cap Equity ETF (NYSE: GSLC), one of the most successful new ETFs to come to market last year, charges 0.09 percent a year, or $9 per $10,000 invested. The average expense ratio for ETFs in the Morningstar US ETF Large Blend Strategic Beta category is 0.38 percent per year, and the average annual fee for funds in the Morningstar US ETF Large Blend Index group is 0.36 percent, according to Goldman.

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Another Few Names: GEM, GSEU, GSJY And GSIE

Goldman added that the current expense ratio of 0.45 percent for the Goldman Sachs ActiveBeta Emerging Markets Equity ETF (NYSE: GEM) will be made permanent and cannot be changed without “the approval of the Board of Trustees of the Goldman Sachs ETF Trust.” GEM, home to over $646 million in assets under management, has a lower-than-average fee compared to other smart beta emerging markets ETFs.

Goldman's other ETFs, the Goldman Sachs ActiveBeta Europe Equity ETF (NYSE: GSEU), Goldman Sachs ActiveBeta Japan Equity ETF (NYSE: GSJY) and the Goldman Sachs ActiveBeta International Equity ETF (NYSE: GSIE) carry annual fees of 0.25 percent, or $25 per $10,000 invested.

As S&P Capital IQ pointed out in a new note, Goldman has been the most prolific asset gatherer among the new entrants to the smart beta field.


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