Goldman Sachs Asset Management Announces Launch of Exchange-Traded Fund to Track JUST Capital’s Index
Jun. 12, 2018
NEW YORK--(BUSINESS WIRE)--Jun 12, 2018--GSAM today announced the launch of JUST, an exchange-traded fund (ETF) that seeks to provide broad exposure to U.S. large cap equities, with a focus on companies that demonstrate just business behavior, as measured by JUST Capital. The ETF seeks to track the JUST U.S. Large Cap Diversified Index (the Index), constructed by JUST Capital.
JUST Capital is an independent nonprofit that uses data and markets to promote positive change in corporate behavior. To create its rankings and the Index, JUST Capital conducts an annual survey of the American public and then analyzes 120,000 data points across 85 unique metrics to score companies based on how they perform on the key issues prioritized by the public.
The Index is designed to provide the broad market exposure of the Russell 1000 Index, while featuring only companies with above-average scores across all major social, environmental, and governance issues critical to the American people.
Historically, companies in the Index on average pay better, create more jobs, pay fewer fines, give twice as much to charity, emit less greenhouse gas, and have higher return on equity, compared with the rest of the Russell 1000. 2
“JUST Capital’s association with GSAM is grounded in a shared belief that capitalism should be a positive force for change and that its future will be driven by a new definition of corporate success that is aligned with the values and priorities of the public,” said Paul Tudor Jones, co-Founder and Chairman of JUST Capital. “We have the unique opportunity to help shift resources toward companies driving change on the country’s most intractable social, environmental, and economic problems.”
Companies are ranked by their overall score, and the top 50% by industry are selected and weighted by market cap, arriving at the final index composition. Instead of a niche or single-issue approach, companies are ranked based on a broad range of categories from worker issues – such as providing a living wage and workplace safety – to customer concerns – such as privacy protection and truthful advertising – to environmental impacts – such as minimizing pollution and resource efficiency.
“JUST is an important financial product — it specifically promotes corporate practices and policies that society values,” said Timothy J. O’Neill, co-head of Goldman Sachs’ Investment Management Division. “This focus allows investment to flow toward a more sustainable and equitable future, while seeking to generate attractive returns for investors.”
About Issuers Included in the JUST U.S. Large Cap Diversified Index 2
Compared with Russell 1000 companies excluded from the Index, JUST U.S. Large Cap Diversified Index constituents on average:Are twice as likely to pay nearly every worker a living wage. Create U.S. jobs at a 20% greater rate. Employ twice as many workers in the U.S. Produce 45% lower greenhouse gas emissions per dollar of revenue. Paid 71% less in fines for consumer sales-terms violations. Give 2.3x more to charity. Paid 94% less in Equal Employment Opportunity Commission Fines. Have a 7% higher Return on Equity (ROE).
GSAM ETF BackgroundGSAM started offering ETFs in September 2015 with the launch of the Goldman Sachs ActiveBeta® U.S. Large Cap Equity ETF (Ticker: GSLC). It now has 12 ETFs with over $8 billion in assets under management as of June 11, 2018. GSAM launched its first fixed income ETF, the Goldman Sachs Treasury Access 0-1 Year ETF (Ticker: GBIL) in September 2016, followed by its Access ETF suite, which includes the Goldman Sachs Access High Yield Corporate Bond ETF (Ticker: GHYB) and the Goldman Sachs Access Investment Grade Corporate Bond ETF (Ticker: GIGB).
About Goldman Sachs Asset Management, L.P. (GSAM)
GSAM is the asset management arm of The Goldman Sachs Group, Inc. (NYSE: GS), which supervises $1.29 trillion in assets as of March 31, 2018. Goldman Sachs Asset Management has been providing discretionary investment advisory services since 1988 and has investment professionals in all major financial centers around the world. The company offers investment strategies across a broad range of asset classes to institutional and individual clients globally. Founded in 1869, Goldman Sachs is a leading global investment banking, securities and investment management firm that provides a wide range of financial services to a substantial and diversified client base that includes corporations, financial institutions, governments and high-net-worth individuals.
About JUST Capital (Just Capital Foundation, Inc.)
JUST Capital, an independent, nonprofit research organization, makes it easier for people, companies, and markets to do the right thing by tracking the business behaviors Americans care about most. The organization’s research, rankings, and indexes help people make more informed decisions about where to invest, work, and buy to direct capital towards companies advancing a more just future. America’s Most JUST Companies, including the groundbreaking JUST 100, is published annually in Forbes and on JUSTCapital.com. Chaired and co-founded by Paul Tudor Jones II, the organization’s board includes Ray Chambers, Jeff Walker, Marc Morial, Mindy Lubber, Dan Hesse, Deepak Chopra, Arianna Huffington, Rinaldo S. Brutoco, and Robert Deutsch amongst others.
1 Please note the figure shown above is the unitary management fee. Under the management fee for JUST, Goldman Sachs Asset Management, L.P., the Funds’ investment adviser, is responsible for paying substantially all the expenses of the Fund, excluding the payments under the Fund’s 12b-1 plan (if any), interest expenses, taxes, acquired fund fees and expenses, brokerage fees, costs of holding shareholder meetings, litigation, indemnification and extraordinary expenses.
2 Source: JUST Capital, based 2016-2017 Index constituents as of December 12, 2017. Figures are subject to change.
Fund Risk Considerations
The Goldman Sachs JUST U.S. Large Cap Equity ETF (the “Fund”) seeks to provide investment results that closely correspond, before fees and expenses, to the performance of the JUST US Large Cap Diversified Index (the “Index”), which delivers exposure to equity securities of large-capitalization U.S. issuers that engage in “just business behavior” based on rankings produced by JUST Capital Foundation, Inc. The Fund’s investments are subject to market risk, which means that the value of the securities in which it invests may go up or down in response to the prospects of individual companies, particular sectors or governments and/or general economic conditions. Because the Fund may concentrate its investments in an industry or group of industries to the extent that the Index is concentrated, the Fund may be subject to greater risk of loss as a result of adverse economic, business or other developments affecting that industry or group of industries. The Fund is subject to risks of “just” investing, as the Index may weigh certain characteristics of “just business behavior” more heavily than an issuer’s performance or returns. The Fund is not actively managed, and therefore the Fund will not generally dispose of a security unless the security is removed from the Index. The Index calculation methodology may rely on information based on assumptions and estimates and neither the Fund nor its investment adviser can guarantee the accuracy of the methodology’s assessment of included issuers. Performance may vary substantially from the performance of the Index as a result of transaction costs, expenses and other factors. Fund shares are not individually redeemable and are issued and redeemed by the Fund at their net asset value (“NAV”) only in large, specified blocks of shares called creation units. Shares otherwise can be bought and sold only through exchange trading at market price (not NAV). Shares may trade at a premium or discount to their NAV in the secondary market. Ordinary brokerage commissions apply. Brokerage commissions will reduce returns.
“JUST” and “JUST Capital” are trademarks of JUST Capital Foundation, Inc. or its affiliates and have been licensed for use in connection with the issuance and distribution of the Goldman Sachs JUST U.S. Large Cap Equity ETF. The Goldman Sachs JUST U.S. Large Cap Equity ETF is not sponsored, endorsed, sold or promoted by JUST Capital Foundation, Inc. JUST Capital Foundation, Inc., its affiliates and any other person or entity involved in or related to compiling, computing, or creating the Goldman Sachs JUST U.S. Large Cap Equity ETF expressly disclaim all representations, warranties, and liabilities relating to or in connection with the Goldman Sachs JUST U.S. Large Cap Equity ETF (including, without limitation, any warranties of originality, accuracy, completeness, timeliness, non-infringement, merchantability, and fitness for a particular purpose). Neither JUST Capital Foundation, Inc. nor any of its affiliates makes any claim, prediction, warranty or representation whatsoever, expressly or impliedly, either as to (a) the results to be obtained from the use of the JUST US Large Cap Diversified Index, the Goldman Sachs JUST U.S. Large Cap Equity ETF, or any of the data included in either of the foregoing, (b) the level at which the JUST US Large Cap Diversified Index or Goldman Sachs JUST U.S. Large Cap Equity ETF is said to stand at any particular time on any particular day or otherwise, (c) the suitability of the JUST US Large Cap Diversified Index for the purpose to which it is being put in connection with the Goldman Sachs JUST U.S. Large Cap Equity ETF, or (d) the advisability of investing in securities generally or in any index or ETF, including those provided by Goldman Sachs. Neither JUST Capital Foundation, Inc. nor any of its affiliates has provided, nor will provide, any financial or investment advice or recommendation in relation to the JUST US Large Cap Diversified Index or the Goldman Sachs JUST U.S. Large Cap Equity ETF, nor will they be (i) liable (whether in negligence or otherwise) to any person for any error in the JUST US Large Cap Diversified Index or (ii) under any obligation to advise any person of any error therein. Without limiting any of the foregoing, in no event shall JUST Capital Foundation, Inc. or its affiliates have any liability for any direct, indirect, special, incidental, punitive, consequential (including without limitation lost profits), or any other damages in connection with the JUST US Large Cap Diversified Index or the Goldman Sachs JUST U.S. Large Cap Equity ETF.
The JUST US Large Cap Diversified Index is calculated and maintained by FTSE Russell using the Russell 1000 Index as a starting universe, and aims to reflect the performance of a JUST Capital Foundation Inc. methodology. FTSE Russell does not sponsor, endorse, sell, or promote any investment vehicle that is offered by any third party that seeks to provide an investment return based on the performance of any index. It is not possible to invest directly in an index. Frank Russell Company (“Russell”) acts solely as calculation agent in respect of the JUST US Large Cap Diversified Index and does not in any way sponsor, support, promote or endorse the JUST US Large Cap Diversified Index or the Goldman Sachs JUST U.S. Large Cap Equity ETF. The JUST US Large Cap Diversified Index was provided on an “as is” basis. Russell, its affiliates and any other person or entity involved in or related to compiling, computing or creating the JUST US Large Cap Diversified Index (collectively, the “Russell Parties”) expressly disclaim all warranties (including, without limitation, any warranties of originality, accuracy, completeness, timeliness, non-infringement, merchantability and fitness for a particular purpose).
Russell does not make any claim, prediction, warranty or representation whatsoever, expressly or impliedly, either as to (i) the results to be obtained from the use of the JUST US Large Cap Diversified Index (upon which the Goldman Sachs JUST U.S. Large Cap Equity ETF is based), (ii) the figure at which the JUST US Large Cap Diversified Index is said to stand at any particular time on any particular day or otherwise, or (iii) the suitability of the JUST US Large Cap Diversified Index for the purpose to which it is being put in connection with the Goldman Sachs JUST U.S. Large Cap Equity ETF.
Russell has not provided and will not provide any financial or investment advice or recommendation in relation to the JUST US Large Cap Diversified Index to Goldman Sachs Asset Management or to its clients. The JUST US Large Cap Diversified Index is calculated by Russell or its agent as calculation agent. Russell shall not be (a) liable (whether in negligence or otherwise) to any person for any error in the Index or (b) under any obligation to advise any person of any error therein.
Without limiting any of the foregoing, in no event shall any Russell Party have any liability for any direct, indirect, special, incidental, punitive, consequential (including without limitation lost profits) or any other damages in connection with the JUST US Large Cap Diversified Index or the Goldman Sachs JUST U.S. Large Cap Equity ETF.
A summary prospectus, if available, or a Prospectus for the Fund containing more information may be obtained from your authorized dealer or from Goldman Sachs & Co. LLC by calling 1-800-621-2550. Please consider a fund’s objectives, risks, and charges and expenses, and read the summary prospectus, if available, and the Prospectus carefully before investing. The summary prospectus, if available, and the Prospectus contains this and other information about the Fund.
The Fund is newly organized and has no operating history. Please note that one cannot invest directly into an index.
THIS MATERIAL IS FOR INFORMATIONAL PURPOSES ONLY AND IS PROVIDED SOLELY ON THE BASIS THAT IT WILL NOT CONSTITUTE INVESTMENT OR OTHER ADVICE OR A RECOMMENDATION RELATING TO ANY PERSON’S OR PLAN’S INVESTMENT OR OTHER DECISIONS, AND GOLDMAN SACHS IS NOT A FIDUCIARY OR ADVISOR WITH RESPECT TO ANY PERSON OR PLAN BY REASON OF PROVIDING THE MATERIAL OR CONTENT HEREIN INCLUDING UNDER THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974 OR DEPARTMENT OF LABOR REGULATIONS. PLAN SPONSORS AND OTHER FIDUCIARIES SHOULD CONSIDER THEIR OWN CIRCUMSTANCES IN ASSESSING ANY POTENTIAL COURSE OF ACTION.
The Investment Company Act of 1940 (the “Act”) imposes certain limits on investment companies purchasing or acquiring any security issued by another registered investment company. For these purposes the definition of “investment company” includes funds that are unregistered because they are excepted from the definition of investment company by sections 3(c)(1) and 3(c)(7) of the Act. You should consult your legal counsel for more information.
Past performance does not guarantee future results, which may vary.
Although certain information has been obtained from sources believed to be reliable, we do not guarantee its accuracy, completeness or fairness. We have relied upon and assumed without independent verification, the accuracy and completeness of all information available from public sources.
Views and opinions expressed are for informational purposes only and do not constitute a recommendation by GSAM to buy, sell, or hold any security. Views and opinions are current as of the date of this press release and may be subject to change, they should not be construed as investment advice.
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© 2018 Goldman Sachs. All rights reserved. Date of First Use: June 12, 2018. 133865-OTU. ALPS Code: GST 690. Expiration Date: June 12, 2019.
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SOURCE: Goldman Sachs Asset Management
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PUB: 06/12/2018 10:00 AM/DISC: 06/12/2018 10:01 AM