Goldman Sachs Asset Management has seen strong net inflows in 2023 into its broad market equity ETFs and its income ETFs. Today, the firm expanded its exchange traded fund lineup to include two equity income ETFs.
The Goldman Sachs Access Treasury 0-1 Year ETF (GBIL) and the Goldman Sachs MarketBeta U.S. Equity ETF (GSUS) have gathered nearly $2 billion of new money in 2023. Growing demand has helped push the firm’s ETF asset base to approximately $30 billion. The two new ETFs will offer a blend of capital appreciation potential with consistent income generation through options.
Meet the New Goldman Sachs ETFs
The Goldman Sachs S&P 500 Core Premium Income ETF (GPIX) seeks to maintain style, capitalization, and industry characteristics like its benchmark, the S&P 500 Index, while providing monthly income distributions at a relatively stable rate.
The Goldman Sachs Nasdaq-100 Core Premium Income ETF (GPIQ) seeks to maintain style, capitalization, and industry characteristics like its benchmark, the Nasdaq-100 Index. It aims to provide monthly income distributions at a relatively stable rate.
We think these new funds could benefit from the simplicity and brand recognition of their benchmarks. The low expense ratios of 0.29% will likely also appeal. Stock-selecting ETFs have gained traction this year. Many people have turned to ETFs believing that replicating an index is better than trying to beat it. To generate above-average income, both funds will employ a dynamic, options-overwrite strategy.
Management will sell call options on a varying percentage of the market value of the equities. The percentage can change month to month. In the funds’ prospectus, Goldman Sachs says that under normal circumstances, it will sell 25%-75% of the value. This could provide GPIX and GPIQ shareholders with more upside potential than some of its fully hedged covered call peers.
