Goldman Sachs launches smart beta HY corporate bond ETF

Sep 8th, 2017 | By | Category: Fixed Income

Goldman Sachs Asset Management (GSAM) has launched the Goldman Sachs Access High Yield Corporate Bond ETF (NYSE Arca: GHYB), offering smart beta exposure to US dollar-denominated high yield corporate bond markets.

Goldman Sachs launches smart beta high yield corporate bond ETF

The Goldman Sachs Access High Yield Corporate Bond ETF is offered with a total expense ratio of 0.34%.

GHYB tracks the Citi Goldman Sachs High Yield Corporate Bond Index which uses a rules-based process to exclude those bonds perceived to have the greatest potential to default or deteriorate in price.

“The Goldman Sachs Access High Yield Corporate Bond ETF seeks to offer investors an innovative approach to access high yield corporate bonds, with a focus on eliminating underperforming assets to potentially provide a smoother ride and better risk-adjusted returns for investors,” said Michael Crinieri, GSAM’s global head of ETF strategy.

“High yield corporate bonds are a natural choice for investors seeking ways to generate yield in their portfolios,” added Jason Singer, portfolio manager for GHYB. “GHYB aims to address concerns surrounding high yield bonds, particularly that they can be less liquid and more prone to default, when compared to other sectors. GHYB seeks to offer a more thoughtful way to access the high yield market in a low-cost, transparent ETF wrapper.”

The underlying index has an effective duration of 3.6 years and is primarily exposed to bonds with credit ratings of BB (53.8%) or B (43.1%).

The largest sector exposures are to consumer cyclical (21.6%), communications (19.7%), consumer noncyclical (13.5%), energy (10.8%) and basic industry (7.2%).

The fund has a total expense ratio (TER) of 0.34%.

The index is owned and calculated by FTSE Fixed Income using concepts developed with GSAM. The CITI mark is used under license by FTSE from Citigroup Index or its affiliates.

GSAM launched its first fixed income ETF, the Goldman Sachs TreasuryAccess 0-1 Year ETF (NYSE Arca: GBIL) in September 2016. It most recently launched the Goldman Sachs Access Investment Grade Corporate Bond ETF (NYSE Arca: GIGB) in June 2017. GIGB utilizes a similar screening methodology as GHYB to US dollar-denominated investment grade bonds.

“With the addition of GHYB, our Access ETF line-up seeks to uniquely provide a desirable, steady income of bonds at a low-cost, focusing on the overall health of company, liquidity and fundamental factors,” added Crinieri.

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