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

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.
JAN 07, 2014
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.

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