Goldman Sachs launches clean energy ETF as ESG popularity soars
Goldman Sachs is getting green as sustainable equity strategies attract record investor capital.
The asset management arm of Wall Street’s premier investment bank on Thursday announced the launch of the Goldman Sachs Bloomberg Clean Energy Equity ETF — set to trade under the ticker GCLN.
The fund, created by Goldman Sachs Asset Management and energy sector specialists at Bloomberg, will track companies with the greatest exposure to the clean energy transition and follows a joint initiative set forth last year by CEOs David M. Solomon and Michael Bloomberg to capitalize on opportunities generated by the transition to clean energy.
Goldman’s new fund comes as environmental, social and governance-focused investment vehicles attract record amounts of investment capital — and deliver stellar returns. Last year, the 13 ESG index funds that follow broad, diversified indexes of U.S. large-cap stocks posted an average gain of 29.2% to beat the S&P 500 (iShares Core S&P 500 ETF returned 28.7%), according to Morningstar research. Seven of the ESG funds generated returns of more than 30%.
The new ETF by Goldman and Bloomberg is designed for investors looking to own “clean energy enablers,” a universe of around 200 companies seeking growth opportunities to combat climate change and provide clean, affordable and reliable energy, Goldman Sachs said.
GCLN will track the Bloomberg Goldman Sachs Global Clean Energy index (BGSCET), market cap-weighted index with exposure to 175 global equities deemed having “significant business exposure” to the clean energy sector.
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“With a continuously evolving market, clean energy companies needed a new benchmark to better understand the performance within the sector,” said Dave Gedeon, Bloomberg’s global head of multi-asset indexes.
Goldman said the fund offers access to the multi-decade clean energy transition estimated to see capital reach in excess of $100 trillion.
“We think that this is going to be a great long-term opportunity for investors,” said Katie Koch, Goldman Sachs Asset Management’s chief investment officer of public equity, in a call with reporters. “We also want to emphasize that this moment now is giving a current attractive entry point from a valuation perspective, so it’s a really good time to get clean.”
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