Goldman Sachs Asset Management Announces Liquidation of Three Exchange-Traded Funds

Rhea-AI Summary

Goldman Sachs Asset Management has announced the liquidation of three ETFs: the Goldman Sachs Bloomberg Clean Energy Equity ETF, North American Pipelines & Power Equity ETF, and Future Real Estate and Infrastructure Equity ETF. The liquidation process begins immediately following board approval. Trading will cease on January 10, 2025, with final liquidation expected around January 17, 2025.

Shareholders can sell their shares on the respective exchanges (Cboe BZX and NYSE Arca) until market close on January 10, 2025. Those holding shares until the liquidation date will receive cash equal to the net asset value. The funds will stop accepting creation orders from Authorized Participants on January 10, 2025. Goldman Sachs Asset Management currently oversees approximately $3.1 trillion in assets under supervision as of September 30, 2024.

Positive

• Assets under supervision stand at $3.1 trillion as of September 30, 2024

Negative

• Liquidation of three ETF products indicates portfolio rationalization
• Shareholders may incur transaction fees when selling shares
• Shareholders may realize capital gains/losses upon liquidation

Insights

Financial Analyst

The liquidation of these three ETFs by Goldman Sachs Asset Management signals a strategic portfolio optimization amid changing market dynamics. The affected funds, focusing on clean energy, pipelines & power and real estate infrastructure, collectively represent a shift in GSAM's product offerings. This move is particularly notable as it impacts specialized sector ETFs in energy and real estate, which have faced challenging market conditions.

Investors have until January 10, 2025, to sell their shares on the open market, with final liquidation expected around January 17, 2025. The orderly wind-down process and clear timeline minimize disruption for shareholders. While the liquidation itself isn't unusual in the ETF industry, it's significant coming from Goldman Sachs, which manages approximately $3.1 trillion in assets. This decision likely reflects both performance challenges and insufficient asset gathering in these specialized sectors.

ETF Market Specialist

This liquidation reflects broader trends in the ETF market where thematic and sector-specific funds face increasing scrutiny over asset gathering capabilities and long-term viability. The timing of the announcement, with a lengthy liquidation period extending into 2025, provides ample opportunity for investors to manage their positions strategically. Shareholders now face three options: selling on the open market before delisting, potentially incurring transaction costs; holding until liquidation and receiving NAV; or repositioning into alternative ETFs in similar sectors.

The clean energy and infrastructure sectors, in particular, have seen significant ETF competition, making it difficult for newer or smaller funds to achieve scale. This move by Goldman Sachs demonstrates the ongoing consolidation in the ETF space, where even major institutions must rationalize their product lineups based on market demand and operational efficiency.

NEW YORK--(BUSINESS WIRE)-- Goldman Sachs Asset Management, the investment adviser for the Goldman Sachs Bloomberg Clean Energy Equity ETF, Goldman Sachs North American Pipelines & Power Equity ETF and Goldman Sachs Future Real Estate and Infrastructure Equity ETF (each, a “Fund” and collectively, the “Funds”), announced today that the Funds’ Board of Trustees, at the recommendation of Goldman Sachs Asset Management, has approved a plan of liquidation for each Fund (collectively, the “Plans”). Under the Plans, which are effective today, the Funds will begin the process of liquidating portfolio assets and unwinding their affairs in an orderly fashion over time. The Plans are not subject to shareholder approval.

Shareholders of the Funds may sell their shares on the Fund’s listing exchange, Cboe BZX Exchange, Inc. (“Cboe”) for the Goldman Sachs Bloomberg Clean Energy Equity ETF and Goldman Sachs North American Pipelines & Power Equity ETF or NYSE Arca, Inc. (“NYSE Arca”) for the Goldman Sachs Future Real Estate and Infrastructure Equity ETF until market close on January 10, 2025, and may incur transaction fees from their broker-dealer. The Funds’ shares will no longer trade on Cboe or NYSE Arca, as applicable, after market close on January 10, 2025, and the shares will subsequently be de-listed. Shareholders who continue to hold shares of a Fund on the Funds’ liquidation date, which is expected to be on or about January 17, 2025, will receive a liquidating distribution of cash in the cash portion of their brokerage accounts equal to the amount of the net asset value of their shares. For tax purposes, shareholders will generally recognize a capital gain or loss equal to the amount received for their shares over their adjusted basis in such shares. The Funds will stop accepting creation orders from Authorized Participants on January 10, 2025.

About Goldman Sachs Asset Management

Goldman Sachs Asset Management is the primary investing area within Goldman Sachs (NYSE: GS), delivering investment and advisory services across public and private markets for the world’s leading institutions, financial advisors, and individuals. The business is driven by a focus on partnership and shared success with its clients, seeking to deliver long-term investment performance drawing on its global network and deep expertise across industries and markets. Goldman Sachs Asset Management is a leading investor across fixed income, liquidity, equity, alternatives, and multi-asset solutions. Goldman Sachs oversees approximately $3.1 trillion in assets under supervision as of September 30, 2024. Follow us on LinkedIn.

The Goldman Sachs Bloomberg Clean Energy Equity ETF (the “Fund”) seeks to provide investment results that closely correspond, before fees and expenses, to the performance of the Bloomberg Goldman Sachs Global Clean Energy Index (the “Index”), which delivers exposure to companies that are expected to have a significant impact on energy decarbonization through their exposure to clean energy. 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. Foreign and emerging markets investments may be more volatile and less liquid than investments in U.S. securities and are subject to the risks of currency fluctuations and adverse social, economic or political developments. Because the Fund may have significant investments in the clean energy sector, the Fund is subject to risk of loss as a result of adverse economic, business or other developments affecting industries within that sector. The securities of mid- and small-capitalization companies involve greater risks than those associated with larger, more established companies and may be subject to more abrupt or erratic price movements. 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, the index provider nor the investment adviser can guarantee the accuracy of the methodology’s valuation of securities or the availability or timeliness of the production of the Index. Performance may vary substantially from the performance of the Index as a result of transaction costs, expenses and other factors.

The Goldman Sachs North American Pipelines & Power Equity ETF (the “Fund”) seeks to provide investment results that closely correspond, before fees and expenses, to the performance of the Solactive Energy Infrastructure Enhanced Index (the “Index”), which is designed to deliver exposure to equity securities of U.S. and Canadian listed companies including companies structured as master limited partnerships (“MLPs”), operating in the pipelines and power universe. 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. Foreign investments may be more volatile and less liquid than investments in U.S. securities and are subject to the risks of currency fluctuations and adverse economic, social or political developments, including sanctions, counter-sanctions and other retaliatory actions. Investments in MLPs are subject to certain additional risks, including risks related to limited control and limited rights to vote on matters affecting MLPs, potential conflicts of interest, cash flow risks, dilution risks, limited liquidity, risks related to the general partner’s right to force sales at undesirable times or prices, interest rate sensitivity and for MLPs with smaller capitalizations, lower trading volume and abrupt or erratic price movements. MLPs are also subject to risks relating to their complex tax structure, including the risk that an MLP could lose its tax status as a partnership, resulting in a reduction in the value of the Fund’s investment in the MLP and lower income to the Fund. MLPs are also subject to the risk that to the extent that a distribution received from an MLP is treated as a return of capital, the Fund’s adjusted tax basis in the MLP interests may be reduced, which may increase the Fund’s tax liability upon the sale of the MLP interests or upon subsequent distributions in respect of such interests. Many MLPs in which the Fund invests operate facilities within the energy sector and are also subject to risks affecting that sector. Because the Index currently concentrates its investments in the energy sector, the Fund is 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 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, the index provider nor the investment adviser can guarantee the accuracy of the methodology’s valuation of securities or the availability or timeliness of the production of the Index. Performance may vary substantially from the performance of the Index as a result of transaction costs, expenses and other factors. The Fund is non-diversified and may invest a larger percentage of its assets in fewer issuers than “diversified” funds. Accordingly, the Fund may be more susceptible to adverse developments affecting any single issuer held in its portfolio and to greater losses resulting from these developments.

The Goldman Sachs Future Real Estate and Infrastructure Equity ETF (the “Fund”) seeks long-term growth of capital. The Fund is an actively managed exchange-traded fund. The Fund pursues its investment objective by primarily investing in U.S. and non-U.S. real estate and infrastructure companies that the Investment Adviser believes are aligned with key themes associated with secular growth drivers for real estate and infrastructure assets. 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. The Fund’s thematic investment strategy limits the universe of investment opportunities available to the Fund and may affect the Fund’s performance relative to similar funds that do not seek to invest in companies exposed to such themes. The Fund relies on the Investment Adviser for the identification of companies the Investment Adviser believes are aligned with key themes associated with secular growth drivers for real estate and infrastructure assets, and there is no guarantee that the Investment Adviser’s views will reflect the beliefs or values of any particular investor or that real estate and infrastructure companies in which the Fund invests will benefit from their associations with secular growth drivers for real estate and infrastructure assets. Different investment styles (e.g., “growth” and “value”) tend to shift in and out of favor, and at times the Fund may underperform other funds that invest in similar asset classes. Because the Fund concentrates its investments in certain specific industries, the Fund is subject to greater risk of loss as a result of adverse economic, business or other developments affecting those industries than if its investments were more diversified across different industries. Stock prices of real estate and infrastructure companies in particular may be especially volatile. Investing in Real Estate Investment Trusts (“REITs”) involves certain unique risks in addition to those risks associated with investing in the real estate industry in general. REITs whose underlying properties are focused in a particular industry or geographic region are also subject to risks affecting such industries and regions. The securities of REITs involve greater risks than those associated with larger, more established companies and may be subject to more abrupt or erratic price movements because of interest rate changes, economic conditions and other factors. Foreign and emerging markets investments may be more volatile and less liquid than investments in U.S. securities and are subject to the risks of currency fluctuations and adverse economic, social or political developments, including sanctions, counter-sanctions and other retaliatory actions. Such securities are also subject to foreign custody risk. The securities of mid- and small-capitalization companies involve greater risks than those associated with larger, more established companies and may be subject to more abrupt or erratic price movements. The Fund is “non-diversified” and may invest a larger percentage of its assets in fewer issuers than “diversified” funds. In addition, the Fund may invest in a relatively small number of issuers. Accordingly, the Fund may be more susceptible to adverse developments affecting any single issuer held in its portfolio and to greater losses resulting from these developments.

Fund shares are not individually redeemable and are issued and redeemed by a 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. Brokerage commissions will reduce returns.

A summary prospectus, if available, or a Prospectus for each 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 Funds.

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.

Goldman Sachs does not provide accounting, tax or legal advice.

© 2024 Goldman Sachs All rights reserved

NOT FDIC INSURED. MAY LOSE VALUE. NO BANK GUARANTEE. NOT INSURED BY ANY GOVERNMENT AGENCY.

ALPS Control: GST: 2818

Compliance Code: 402923-OTU-2167293

Date of first use: 12/12/2024

View source version on businesswire.com: https://www.businesswire.com/news/home/20241212407058/en/

Media:

Victoria Zarella

Tel: 212-902-5400

Source: Goldman Sachs Asset Management

FAQ

When will Goldman Sachs ETFs stop trading before liquidation?

The three Goldman Sachs ETFs will stop trading on January 10, 2025, at market close.

What is the expected liquidation date for the Goldman Sachs ETFs?

The expected liquidation date is on or about January 17, 2025.

What happens to shareholders who hold the ETFs until liquidation?

Shareholders who hold shares until liquidation will receive a cash distribution equal to the net asset value of their shares in their brokerage accounts.

What are the tax implications for shareholders of the liquidating ETFs?

Shareholders will generally recognize a capital gain or loss equal to the amount received for their shares over their adjusted basis in such shares.

Which exchanges currently list the affected Goldman Sachs ETFs?

The Clean Energy and Pipelines & Power ETFs trade on Cboe BZX Exchange, while the Future Real Estate and Infrastructure ETF trades on NYSE Arca.