Goldman to Launch First ETF

Goldman Sachs Group Inc said on Monday it was launching its first ever exchange traded fund, as the bank tries to break into the lucrative and highly competitive $3 trillion market for ETFs.

The fund, focused on large U.S. companies, follows a so-called “ActiveBeta” strategy which tries to outperform a traditional market-cap weighted index by looking at factors like volatility and momentum.

Goldman is attempting to enter a market in which BlackRock Inc, State Street and Vanguard together account for about 70 percent of total assets in the global ETF industry. ETFs, which allow investors to gain exposure to a particular group of companies or indexes without owning the underlying stocks or bonds, have gained popularity in recent years because of their low costs and transparency.

The bank is introducing new products as it seeks to grow revenue in its investment management division. Investment management is becoming more important to Goldman and other Wall Street banks amid regulatory pressures that have crimped growth in traditional profit drivers like trading.

Goldman last year announced that senior trading executive Michael Crinieri would head its ETF strategy globally.

via Reuters

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Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza