Goldman Sachs Group Inc., rarely thought of as a low-cost option, is seeking to be just that with a new line of exchange-traded funds.
The firm will waive a portion of its management fee and limit expenses for at least the first year of the large-cap version of its so-called ActiveBeta ETFs, according to a regulatory filing Friday. That will make the expense ratio 9 basis points, or $9 in annual fees for every $10,000 invested, lower than the 9.5 basis points charged by the world's largest ETF, the SPDR S&P 500 fund.
(More: Smart-beta upstart goes after the big boys wielding lower fees as a weapon)
Goldman Sachs is seeking to capitalize on the growth in ETFs as part of its goal of increasing investment-management revenue by more than 10% a year. The bank announced pricing for six funds focused on so-called active beta strategies, or weighting indexes based on valuation or growth instead of size or share price.
FUNDS THIS YEAR
Goldman Sachs expects to begin issuing funds this year, a person briefed on the matter said in June. The effort is led by Michael Crinieri, who moved over from the New York-based firm's trading division in 2014. The bank hired
BlackRock Inc. veteran Tony Kelly as head of product development for the unit earlier this year.
The firm is also covering expenses for the five other ETFs it's starting to keep investor costs down. The large cap fund's expense ratio is below the median of 50 basis points for large-cap U.S. ETFs, according to data compiled by Bloomberg.
Goldman Sachs last year bought Westpeak Global Advisors to spur growth in its beta products after seeing more demand from clients. Beta refers to how much an asset's price moves in relation to the broader market and typically describes products that track an index rather than invest based on a manager's views.
The ETF industry took 23 years to reach $2 trillion in assets and just two more years to reach $3 trillion, which it did in May, according to research and consultancy firm ETFGI.
