Goldman opens $448M nontraded-liquid-alternatives-bond fund

The fund, which offers only limited, quarterly share repurchases, will be folded into yet-to-be launched open-end credit strategies fund

Oct 31, 2013 @ 8:59 am

By Jason Kephart

+ Zoom

Goldman Sachs Asset Management is giving its fixed-income alternatives fund lineup a boost by converting its nontraded Credit Strategies Fund into a new liquid-alternatives-bond fund.

Goldman plans to fold the $448 million fund, which offers only limited, quarterly share repurchases, into the yet-to-be launched open-end Goldman Sachs Long Short Credit Strategies Fund, pending shareholder approval, according to a filing with the Securities and Exchange Commission.

Konstantin Shiskin, a spokesman for Goldman, declined to comment beyond the filing.

The planned long-short credit fund will be the latest edition to Goldman's booming fixed-income-alternatives lineup.

Ever since the interest rate on the 10-year Treasury bond spiked in the second quarter, causing widespread losses among bond funds, investors have been shifting away from those funds tied to benchmarks, such as the Barclays U.S. Aggregate Bond Index, in favor of more flexible strategies.

In theory, the more flexible a bond fund is, the better chance the manager has to dodge the pain of rising interest rates. Bond prices move down as interest rates move up.

Goldman has been one of the biggest beneficiaries of that trend.

The $11 billion Goldman Sachs Strategic Income Fund (GSZAX) has a return of 3.51% year-to-date through Oct. 29, way ahead of the average intermediate-term bond fund's 0.6% loss over the same time period.

In the third quarter, the fund had net inflows of $4.17 billion, narrowly edging out the $22.8 billion JPMorgan Strategic Income Opportunities Fund (JSOAX), as the top-selling bond fund for the quarter, according to Morningstar Inc.

Sales of GSZAX led Goldman to the top of the overall bond sales charts in the third quarter. Its bond funds' took in $3.2 billion during the third quarter, ahead of BlackRock Inc.'s $3.1 billion, according to mutual fund research firm Strategic Insight.

Pacific Investment Management Co., which usually holds the top spot in bond fund sales, had $24 billion of net redemptions for the third quarter, according to Morningstar.

0
Comments

What do you think?

View comments

Recommended for you

Featured video

Events

Albridge's Butler: Making advisers of tomorrow more effective and efficient

Gadget Girl checks out the latest tech from Albridge and how they're helping advisers stay one step ahead of the curve.

Video Spotlight

Will It Last As Long As Your Clients Do?

Sponsored by Prudential

Video Spotlight

The Catalyst

Sponsored by Pershing

Latest news & opinion

10 funds with largest 3-year outflows

Even well-managed funds that have beaten the S&P 500’s 10.1% average annual gain have watched investors flee.

Wirehouse training programs are back

At one time, major brokerage houses ran large, expensive training programs for thousands of young brokers, and now it looks as if they are about to return to that model.

New military pension rules need financial advisers to step up and serve

Matching defined contribution plan expected to see more money, more need for sound advice.

Brian Block's $4 million bonus was tied to a key metric at ARCP

Prosecution rests case in fraud trial against CFO of American Realty Capital Properties.

Edward Jones is winning the Google search war

Brokerage firm's digital marketing investment helps land it at the top of local and overall search engine results, report finds.

X

Subscribe and Save 60%

Premium Access
Print + Digital

Learn more
Subscribe to Print