The demand for exchange-traded funds (ETFs) among investors is showing no signs of slowing down, and firms that do not currently offer ETF products may be putting their businesses at risk. According to Steve Sachs, the global chief operating officer of Goldman’s ETF Accelerator, the decision not to offer ETFs could result in a significant opportunity cost for firms. Sachs pointed out that many clients are increasingly looking for new investment strategies in the form of ETFs, and firms that do not provide these products may see their assets move to competitors who do.
Launching an ETF can be a time-consuming and resource-intensive process. However, Sachs believes that the potential cost of not offering ETF products can be even greater. Firms that do not have ETF offerings could risk losing assets to competitors that do. To assist clients in launching their own ETF products, Goldman Sachs developed the ETF Accelerator, a digital platform designed to help clients efficiently launch, list, and manage their ETF products. The accelerator was launched in response to a growing demand from clients who were seeking guidance on how to enter the ETF space and deliver their investment strategies through an ETF wrapper.
The passage of SEC Rule 6c-11 in 2019 played a significant role in driving client interest in launching ETFs. The rule aimed to streamline the process for launching ETFs, making it easier for funds to enter the market. Sachs noted that while the rule made it easier to launch an ETF, it still requires expertise, resources, and risk management frameworks. Many clients turned to Goldman Sachs for assistance in navigating this process, leading to the creation of the ETF Accelerator platform.
Goldman Sachs’ ETF Accelerator platform provides clients with the tools and expertise needed to launch, list, and manage their own ETFs. By leveraging Goldman’s technology, infrastructure, and risk management capabilities, clients can access the market faster and more cost-effectively than if they were to do it on their own. Since its launch, the accelerator has facilitated the launch of several ETFs, including Eagle Capital Management’s Select Equity ETF, GMO’s U.S. Quality ETF, and three funds from Brandes Investment Partners. These firms chose to leverage the accelerator platform because they believed that building an ETF product on their own would be too expensive and time-consuming.
The demand for ETFs continues to grow among investors, and firms that do not offer ETF products may be jeopardizing their business. The launch of the ETF Accelerator by Goldman Sachs provides clients with a streamlined process for entering the ETF market, allowing them to leverage Goldman’s expertise and resources to bring their investment strategies to market more efficiently. As the popularity of ETFs continues to rise, firms without ETF offerings may find themselves at a competitive disadvantage.