The fund’s new objective is to provide income and capital appreciation through investing in higher-yielding bonds and higher dividend-paying stocks.
Investors want attractive, consistent monthly income from their investment vehicles because of the low interest rate environment, according to Glen Casey, global head of Global Product Strategy and Development for GSAM. “Goldman Sachs Income Builder Fund is designed to access income opportunities across a broad set of asset classes,” Casey said. “While the fund is focused on high-quality stocks and high-yield bonds in industries that may be less susceptible to market cycles, its flexible mandate allows it to invest in nontraditional asset classes, including non-U.S. securities, convertible bonds, preferred stock, REITs and MLPs.”
The fund employs a baseline allocation of half to fixed-income securities and half to equity securities, with the flexibility to tilt allocation up to 15% above or below the baseline toward either asset class. The fund pays dividend and interest income monthly, and its new benchmarks are the Russell 1000 Value and the BofA Merrill Lynch U.S. High Yield BB-B Rated Constrained Index.
The fixed-income portion of the fund’s portfolio continues to be managed by GSAM’s Fixed Income team. The management of the equity portion has transitioned from the Quantitative Investment Strategies team to the Fundamental Equity team, which employs an active, bottom-up stock selection process.
The fund is offered in Class A and Class C Shares, both with $1,000 minimum initial investments. Institutional, Class R and Class IR Shares are also offered.