Is Wall Street investigate next frontier for ETFs?
Goldman Sachs just filed for a fresh ETF referred to as Goldman Sachs Hedge Fund VIP ETF, which is based its popular “Hedge Fund Trend Monitor” research report released by Ben Snider, David Kostin along with other analysts from Goldman’s Global Investment Research division.
The research report – along with the ETF – tracks the 50 companies that matter most to fundamentally driven hedge funds as found in their 13F filings. A 13F could be a quarterly holdings report essential for any hedge fund company using more than $100 million focused on U.S. equities.
The ETF would mark the first time a Wall Street bank uses its research report since the basis for an ETF. Although this isn’t Goldman’s own investment calls alone, it’ll suggest to them trying to leverage among their greatest strengths inside an ETF and differentiate itself from the crowded field well over 1,800 ETFs in the much more than 50 different companies. If these ETFs gather assets, this might are a trend for giant Wall Street banks, numerous whom really are a new comer towards the ETF market.
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It ought to be noted that Goldman’s ETF wouldn’t be the first one to track hedge funds’ stock holdings. There are several ETFs that already do that, typically the most popular to be the US-120 million Global X Guru Index ETF (GURU). However, these do something diversely.
The filing from Goldman included too another new ETF born utilizing their global investment research group known as the Goldman Sachs High Sharpe Ratio ETF, that will equal-weight 50 large-cap stocks that report the greatest risk-adjusted return. This ETF is based on Goldman’s U.S. Weekly Kickstart strategy report, which showed the way a portfolio of stocks based on high Sharpe ratios had outperformed most mutual funds as well as the S&P 500 Index. While Sharpe ratio is really a well-liked metric, there’s never been an ETF built solely around it.
One question now’s the time period until Goldman – and perhaps other Wall Street banks – start packaging their much-publicized market calls and stock picks into an ETF? This could allow investors to skip all the middlemen – along with fees – in order to take their money where Goldman’s mouth is.
However, given that Goldman has abandoned five from the top six trades for 2016, possibly the timing with this particular concept might be a sub-standard this season.
Bloomberg News
