According to a Goldman Sachs expert, demand for exchange-traded funds (ETFs) is on the rise, and companies that do not offer ETFs may risk losing business. Steve Sachs, the global chief operating officer of Goldman’s ETF Accelerator, emphasizes the importance of providing current and new investment strategies as ETFs to avoid potentially higher costs in the long run.
Sachs believes that firms without ETF offerings may see their assets move to competitors that do offer them. To assist clients in launching their own ETF products, Goldman Sachs created the ETF Accelerator, a digital platform that helps clients launch, list, and manage their ETF products. The platform was launched in response to significant client demand for entering the ETF space.
Client inquiries about launching ETFs increased after the passage of SEC Rule 6c-11 in 2019, which aimed to streamline the process of launching these funds. Sachs acknowledges that launching an ETF still requires expertise, resources, and risk management, which is where the Goldman accelerator platform can be beneficial.
Since its inception, the accelerator has facilitated the launch of several ETFs, including the Eagle Capital Management’s Select Equity ETF (EAGL), GMO’s U.S. Quality ETF (QLTY), and three funds from Brandes Investment Partners. These companies opted to use the accelerator platform to avoid the high costs and long timeline associated with building their ETFs independently.
Overall, Sachs stresses the importance of embracing the ETF trend to avoid missing out on delivering investment strategies in an ETF wrapper.
As investor demand for exchange-traded funds continues to grow, firms without ETF offerings may risk losing business according to Steve Sachs, global chief operating officer of Goldman’s ETF Accelerator. Sachs notes that the opportunity cost of not offering ETF products is greater than the time and resources required to launch them. To help clients launch their own ETF products, Goldman Sachs created its ETF Accelerator digital platform in response to significant client demand. Client inquiries about launching ETFs surged after the passage of SEC Rule 6c-11 in 2019, which intended to help funds launch more efficiently. The accelerator aims to help clients navigate the complexities of launching an ETF and has facilitated the launch of five ETFs so far. Firms like Eagle Capital Management, GMO, and Brandes Investment Partners have all utilized the accelerator to bring their investment strategies to market faster and cheaper than they could on their own.
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