Investor demand for exchange-traded funds (ETFs) is on the rise, and firms without ETF offerings may risk losing business, according to Steve Sachs, global chief operating officer of Goldman Sachs’ ETF Accelerator. Sachs notes that not offering investment strategies as ETFs could prove costlier in the long run. Clients are increasingly looking to enter the ETF space, with many assets potentially moving to competitors who do offer ETF products. To assist clients in launching their own ETFs, Goldman Sachs introduced its ETF Accelerator in 2022, a digital platform that helps clients launch, list, and manage their ETF products.
The creation of the ETF Accelerator was in response to significant client demand, with inquiries about launching ETFs increasing after the passage of SEC Rule 6c-11 in 2019. While the rule aimed to make it easier for funds to launch, Sachs emphasizes that launching an ETF still requires expertise, headcount, and a risk management framework. The accelerator platform allows clients to leverage Goldman’s technology, infrastructure, and expertise to get to market faster and more cost-effectively. Since its inception, five ETFs have been launched through the accelerator, including Eagle Capital Management’s Select Equity ETF (EAGL), GMO’s U.S. Quality ETF (QLTY), and three funds from Brandes Investment Partners.
Sachs highlights that firms like GMO, Brandes, and Eagle Capital felt that building their ETFs independently would be too expensive and time-consuming. They opted to leverage the accelerator platform to avoid missing the opportunity cost of not delivering their investment strategies in an ETF wrapper. Despite the time and resources required to launch an ETF, Sachs emphasizes that not offering ETF products could result in assets leaving for competitors who do offer such products. The ETF Accelerator aims to help clients navigate the complexities of launching an ETF more efficiently.
Goldman Sachs’ ETF Accelerator provides clients with the technology, infrastructure, and risk management expertise needed to launch their own ETF products. The platform enables clients to launch, list, and manage ETFs more quickly and cost-effectively than they could on their own. By leveraging Goldman’s resources and experience, clients can bring their investment strategies to market in an ETF wrapper, meeting the growing demand for such products among investors. The accelerator has facilitated the launch of several ETFs, with more firms considering using the platform to enter the ETF space.
In conclusion, the demand for ETF products is increasing among investors, and firms without ETF offerings risk losing business to competitors that do have ETF products. Goldman Sachs’ ETF Accelerator aims to help clients launch their own ETFs more efficiently by providing technology, infrastructure, and risk management expertise. Clients can leverage the accelerator platform to bring their investment strategies to market in an ETF wrapper, meeting investor demand for these products. The platform has facilitated the launch of several ETFs since its inception, providing firms with a cost-effective and streamlined way to enter the ETF space and avoid missing out on potential business opportunities.
