In today’s financial landscape, the demand for exchange-traded funds (ETFs) is continuously increasing. Firms that do not have ETF offerings are at risk of losing business opportunities, according to a leading expert from Goldman Sachs. Steve Sachs, the global chief operating officer of Goldman’s ETF Accelerator, emphasizes the importance of adapting to the market trends by offering current and new investment strategies as ETFs. Not doing so can result in a significant opportunity cost for firms.
The Risk of Not Offering ETF Products
Sachs suggests that firms without ETF offerings may lose assets to competitors who do offer such products. In a competitive market, failing to provide clients with ETF options can lead to a decline in business and market share. The shift towards ETFs as popular investment vehicles makes it essential for firms to consider expanding their product offerings to include ETFs.
Goldman Sachs recognized the need to assist clients in launching their own ETF products, leading to the creation of the ETF Accelerator program. This digital platform helps clients navigate the process of launching, listing, and managing ETFs efficiently. The launch of the accelerator in 2022 was in response to increased client demand for ETF-related services.
Client inquiries about launching ETFs saw a significant surge following the implementation of SEC Rule 6c-11 in 2019. This rule aimed to streamline the process of launching ETFs and make it more efficient for firms. Goldman Sachs responded to the increased demand by providing clients with the necessary resources and expertise to enter the ETF space successfully.
Launching an ETF can be a complex and time-consuming process, requiring expertise, resources, and risk management frameworks. Goldman’s accelerator platform aims to simplify this process for clients, allowing them to leverage the technology and infrastructure of Goldman Sachs to bring ETFs to market faster and at a lower cost. Since its inception, the accelerator has facilitated the launch of multiple successful ETFs, including Eagle Capital Management’s Select Equity ETF, GMO’s U.S. Quality ETF, and three funds from Brandes Investment Partners.
Client Success Stories
Numerous clients have benefited from the ETF Accelerator program, including Eagle Capital Management, GMO, and Brandes Investment Partners. These firms recognized the challenges of independently launching ETFs and turned to Goldman Sachs for support. The success of these collaborations underscores the value of having a partner like Goldman Sachs to navigate the complexities of the ETF market.
The increasing demand for ETFs highlights the importance for firms to adapt and offer ETF products to meet client needs. Firms that fail to do so risk losing out on business opportunities and market share. By leveraging programs like Goldman Sachs’ ETF Accelerator, firms can successfully enter the ETF space and capitalize on the growing popularity of ETFs in the financial industry.
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