As sustainable equity strategies garner record investor cash, Goldman Sachs is going green.
The Goldman Sachs Bloomberg Clean Energy Equity ETF, which will trade under the ticker GCLN, was introduced Thursday by the asset management arm of Wall Street’s largest investment bank, Yahoo Money reports.
The fund, created by Goldman Sachs Asset Management and Bloomberg energy sector specialists, will track companies with the greatest exposure to the clean energy transition, and it follows a joint initiative launched last year by CEOs David M. Solomon and Michael Bloomberg to capitalize on opportunities created by the clean energy transition.
Goldman’s new fund comes at a time when environmental, social, and governance-focused investment vehicles are attracting unprecedented amounts of cash – and delivering fantastic returns. According to Morningstar data, the 13 ESG index funds that track wide, diversified indexes of U.S. large-cap companies outperformed the S&P 500 by an average of 29.2 percent last year. Seven of the ESG funds had returns of more than 30%.
According to Goldman Sachs, the new ETF is intended for investors wishing to acquire “clean energy enablers,” a universe of about 200 firms seeking growth prospects to tackle climate change and offer clean, cheap, and dependable energy.
GCLN will follow the Bloomberg Goldman Sachs Worldwide Clean Energy index (BGSCET), a market capitalization-weighted index that includes 175 global stocks with “substantial business exposure” to the clean energy industry.
“With a constantly changing market, clean energy firms required a new benchmark to better evaluate the sector’s performance,” said Dave Gedeon, Bloomberg’s global head of multi-asset indexes.
According to Goldman, the fund provides access to the multi-decade sustainable energy transformation, which is expected to raise more than $100 trillion in cash.
In a recent statement, Jason Hoody, LPL Financial’s head of investment manager research and sustainable investing research, said that sustainable investing mutual funds and exchange-traded funds continue to garner record flows from clients.
According to LPL, assets increased by 52% year on year to $362 billion as of December 31, 2021.
According to Hoody, the lineup of sustainable investment mutual funds and ETFs has also risen since the first was released in 1971. The number of possible options increased by 44 percent to 560 in 2021.
Investor questions regarding sustainable and ESG strategies have surpassed inquiries about more conventional investing choices over the last decade, says Peter Essele, Commonwealth Financial Network’s head of portfolio management.