Goldman Sachs Launches New ActiveBeta ETF

Goldman Sachs Asset Management today announced the launch of GSSC, the sixth product in its ActiveBeta suite of exchange traded funds (ETFs). The fund seeks to provide low-cost access to small capitalization U.S. equities by tracking GSAM’s proprietary Goldman Sachs ActiveBeta U.S. Small Cap Equity Index.

GSSC will be passively managed by GSAM’s Quantitative Investment Strategies team. 

“Over the last two years, we have focused on building a suite of innovative, low-cost ETFs that allow investors to access key markets while harnessing the time-tested benefits of a factor-diversified approach,” says Michael Crinieri, GSAM’s global head of ETF strategy. “After applying our ActiveBeta approach to large cap equities in the U.S. as well as in emerging markets, developed international equities, Europe and Japan, we are thrilled to now apply it to a market as dynamic and diverse as U.S. small cap equities.”

The index seeks to emphasize and underweight certain securities according to performance factors including value, momentum, quality and low volatility. It aims to remain broadly in-line with traditional market-cap weighted U.S. small cap indices.

“GSSC is a result of continued investor demand for products that offer a multi-factor investment approach, providing exposure to small cap equities by leveraging our quantitative investment expertise,” says Gary Chropuvka, head of customized beta strategies within the Quantitative Investment Strategies team.

NEXT: WisdomTree Sprouts New Smart Beta ETF

WisdomTree Sprouts New Smart Beta ETF

WisdomTree has launched a new smart beta exchange-traded fund (ETF), the WisdomTree U.S. Multifactor Fund (USMF), on the BATS Exchange. USMF seeks to track the price and yield performance of the WisdomTree U.S. Multifactor Index and has a net expense ratio of 0.28%.

The ETF employs what WisdomTree calls an alpha-driven smart beta strategy, meaning the fund will directly target multiple smart beta factors. The WisdomTree U.S. Multifactor Index was designed to beat the market through a selection and weighting methodology allowing for exposure to value, quality, momentum, size and low correlation, while managing volatility and maintaining sector neutrality.

Luciano Siracusano, chief investment strategist at WisdomTree explains, “WisdomTree’s existing suite of dividend- and earnings-weighted ETFs have typically tapped into the smart beta factors of value, quality and size and, in many instances, have outperformed their market capitalization-weighted benchmarks, while exhibiting relatively low tracking error against those benchmarks. But, for investors willing to assume higher tracking error relative to traditional market capitalization-weighted benchmarks, a multifactor approach, such as the WisdomTree U.S. Multifactor Fund, has the potential to enhance returns, while providing greater factor diversification and thus, may lower volatility compared to single-factor approaches.”

For more information about the USMF, visit WisdomTree.com.

NEXT: Manning & Napier Rolls out Disciplined Value CIT

Manning & Napier Rolls out Disciplined Value CIT

Manning & Napier have launched the Disciplined Value Collective Investment Trust Fund (CIT). It will be offered as a U-class, zero-revenue share product with a trustee fee of 0.25%.

First established in 2003, Manning & Napier's Disciplined Value strategies are a suite of value-oriented, systematic equity portfolios. These strategies aim to provide competitive returns consistent with the broad equity market while also providing a level of capital protection during market downturns. Securities are selected from a universe of mid-to-large capitalization companies based on factors such as free cash flow yield, dividend yield, dividend sustainability, and financial health.

"According to a recent Manning & Napier survey, 83% of employers are concerned about the current increase in litigation pertaining to investment selection and fee reasonableness," observes Shelby George, defined contribution practice leader at Manning & Napier. "CITs are an increasingly important part of the fiduciary due diligence process. While it has always been important for fiduciaries to consider CITs because of the many benefits they provide to participants, today's 401(k) fee litigation is making it essential for fiduciaries to give CITs a hard look."

"We continue to develop solutions to meet participant needs," George adds. "Today's slow growth outlook and volatility coupled with low interest rates create a challenging environment, particularly for participants nearing retirement. The Disciplined Value CIT is designed to help these participants generate strong absolute returns with lower volatility while providing consistent downside risk management."

The Disciplined Value strategy is available as a separately managed account with a minimum investment of $250,000, and as a mutual fund.

NEXT: T. Rowe Price Rolls Out Retirement Income 2020 Fund

T. Rowe Price Rolls Out Retirement Income 2020 Fund

T. Rowe Price has launched the Retirement Income 2020 Fund, designed for investors nearing retirement and focused on generating income from their accumulated retirement savings through a managed-payout structure paying out monthly dividends based on an annual distribution rate. The fund serves as a complement to T. Rowe Price’s existing lineup of target-date funds.

The fund will invest in other T. Rowe Price funds representing various asset classes and sectors. Its allocation between T. Rowe Price stock and bond funds will change in time in relation to its 2020 target retirement date. Monthly dividend payments will be made mid-month to all shareholders of the fund, regardless of age or retirement status.

The fund’s annual payout will be calculated September 30 of each year as 5% of the average monthly net asset value over the trailing five years. The calculation is intended to reduce the effects of market volatility on the income payments.

The fund will have an identical investment profile to the existing T. Rowe Price Retirement 2020 Fund. This includes the same asset allocation, glide path, and underlying funds. It is not intended at this time to be used in defined contribution retirement plan accounts, the firm notes.  

The fund’s net expense ratio is 0.74% and will initially be offered only with an investor class. Operating expenses will be capped at 0.25% at least through April 30, 2020.

NEXT: SEI Trust Releases U.S. CIT with Canadian Firm

SEI Trust Releases U.S. CIT with Canadian Firm

SEI Trust Company has partnered with Montreal-based investment management firm Addenda Capital to launch a collective investment trust (CIT) fund in the United States. SEC-registered Addenda will serve as adviser to the fund.

The company conducts research integrating ESG (environmental, social and governance) factors into its investment processes with an aim for long-term returns and low turnover.

“Building on our success in Canada, we want to intensify our business development activities in the United States,” says Roger Beauchemin, president and CEO of Addenda Capital. “Our international equity strategy has performed well above industry average and we are confident that we can deliver superior results to investors thanks to our 20-plus years of experience, our innovative approach and the CIT’s low-cost structure. We now have dedicated resources to build relationships with institutional investors and consultants across the U.S.”