Goldman Sachs Asset Management expands fixed income ETF portfolio

Goldman Sachs Asset Management has introduced four new ETFs, expanding its fixed income ETF portfolio. The new funds, named Goldman Sachs Ultra Short Municipal Income ETF (GUMI), Goldman Sachs Municipal Income ETF (GMUB), Goldman Sachs Dynamic California Municipal Income ETF (GCAL), and Goldman Sachs Dynamic New York Municipal Income ETF (GMNY), aim to provide investors with cost-efficient access to municipal bonds, an asset class that offer attractive after-tax income potential while serving as valuable diversifiers within core fixed income portfolios.

Brendan McCarthy, global head of ETF distribution at Goldman Sachs Asset Management, emphasized the strategic timing of this launch. “With clients anticipating the end of the Fed’s rate hiking cycle, our new suite of active municipal bond ETFs provides access to an asset class that has provided bond portfolio diversification while providing attractive tax-equivalent yields,” McCarthy stated. He highlighted that the addition of these funds allows Goldman Sachs to leverage its longstanding expertise in municipal bonds to meet client portfolio needs through accessible ETF vehicles.

New municipal income ETFs

Goldman Sachs Ultra Short Municipal Income ETF (GUMI): This fund seeks to provide high current income with relatively low principal volatility, exempt from regular federal income tax. It focuses on shorter-dated maturities across both fixed rate and floating rate structures within the municipal investment-grade spectrum.

Goldman Sachs Municipal Income ETF (GMUB): Targeting high current income exempt from federal income tax, this ETF invests in a diversified portfolio of investment-grade municipal bonds and may allocate up to 15% of net assets to non-investment grade municipal bonds, with a duration range of 3 to 6 years.

Goldman Sachs Dynamic California Municipal Income ETF (GCAL): Aiming to provide high current income exempt from federal and California state income taxes, GCAL invests dynamically across the municipal yield curve and credit quality spectrum to maximize total return. It allows for duration flexibility between 2 and 8 years and can hold up to 30% of net assets in non-investment grade municipal bonds.

Goldman Sachs Dynamic New York Municipal Income ETF (GMNY): Similar to GCAL, GMNY seeks high current income exempt from federal, New York State, and New York City income taxes by dynamically investing along the municipal yield curve and credit quality spectrum. It also offers duration flexibility between 2 and 8 years and may hold up to 30% of net assets in non-investment grade municipal bonds.

Scott Diamond, co-head of municipal fixed income at Goldman Sachs Asset Management, noted the evolving municipal bond landscape and the opportunities it presents. “The changing municipal bond landscape offers nimble investors a potential opportunity to take advantage of attractive risk/reward trade-offs; however, sector and credit selectivity will continue to be vital,” Diamond said. He pointed to Goldman Sachs Asset Management’s three decades of disciplined risk management in the municipal bond market and expressed excitement about bringing this expertise to a broader investor base through these new ETFs.

With the addition of GUMI, GMUB, GCAL, and GMNY, Goldman Sachs Asset Management now manages 42 ETF strategies in the US, representing over $35 billion in assets as of June 30, 2024. Goldman Sachs Asset Management is a key investing division of Goldman Sachs, providing investment and advisory services across public and private markets globally. Goldman Sachs oversees more than $2.9 trillion in assets under supervision as of June 30, 2024.