Goldman follows Cathie Wood’s Ark with a new technology-focused active ETF

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Goldman Sachs, a Wall Street bank, has followed the path burned by Cathie Wood’s arc invest blockbuster and launched an aggressively managed equity fund to bet on emerging tech companies.

Goldman Sachs Asset Management announced Thursday that its Future Tech Leaders ETF (GTEK) will own 60-80 listed global tech names with a market capitalization of less than $ 100 billion. ETFs focus on emerging chip makers, software, financial technologies and cybersecurity groups.

Goldman is a new fund that seeks to open up a fast-growing market for actively managed “thematic” ETFs focused on up-and-coming technology groups. The Wood’s Ark Fund has raised billions of dollars in new client funding in recent years, tracking a strong bull market in the tech sector, and many investment managers are now looking to benefit from this enthusiasm. increase.

“We know Cathie Wood. She is a formidable competitor,” said Katie Koch, co-head of the fundamental equity business at Goldman Sachs Asset Management. Unlike the approach adopted by other thematic ETFs such as Ark, GTEK targets small, innovative tech companies that account for nearly half of the outside US, and megacaps such as Apple and Amazon. Emphasized not to have.

Goldman said he intends to invest in a fund like Ark that provides regular updates on positions and transactions with clients.

Ark’s major innovation funds surged nearly 150 percent last year, as many of their holdings benefited from the coronavirus crisis. However, it has lost 5% so far in 2021, well below the nearly 20% rise in the wide S & P 500, attracting bearish bets by prominent investors such as Michael Bury.

Ark has many small names, but nearly half of them Innovation fund It consists of 10 large holdings led by Tesla, Teladoc health, Unity Software, Roku and Coinbase.

Goldman Sachs Asset Management manages over $ 20 billion in thematic equity strategies for clients and oversees $ 5.3 billion in the same thematic strategies as the new ETFs for offshore clients.

“The dominant technology franchise in 10 years is very different from the platform we know today,” says Koch. “Many investors are overexposed to mature US megacap tech companies, as nearly a quarter of the S & P 500’s market capitalization is in the top 1% of its stock.”

GTEK managers Brook Dane and Sung Cho said the fund will maintain “strong valuation discipline” for its holdings and will also monitor liquidity constraints associated with the ownership of small listed companies.

At least a quarter of GTEK’s holdings are in emerging markets, and Cho said “innovation has just begun” in regions such as Southeast Asia and Latin America.

The fund hopes to overcome the growing backlash towards large corporations in the sector, led by Beijing’s current crackdown on owning the next generation of tech innovators. Hong Kong-based Nathan Lin for GSAM will also help manage GTEK.

“One of the biggest risks to technology is the global regulatory environment, not just China,” said Dane. An aggressive management approach helps them overcome regulatory changes, and the fund owns Chinese software and chip makers. These are considered important areas of Beijing’s expansion.

“Semiconductors will be one of the most protected areas in China,” Cho said.

Among GTEK’s holdings are Hong Kong-listed Chinese software company Kingdee, chip maker Entegris, Australian Atlassian software, and Palo Alto Networks.

Goldman follows Cathie Wood’s Ark with a new technology-focused active ETF

Source link Goldman follows Cathie Wood’s Ark with a new technology-focused active ETF

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