Goldman Sachs Smart Beta
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Goldman Sachs Smart Beta
Goldman Sachs Smart Beta refers to the suite of smart beta investment strategies offered by the financial institution Goldman Sachs. Smart beta strategies are a type of investment approach that combines elements of both traditional passive investing and active investing. They look to give financial backers better gamble changed returns contrasted with traditional market-cap weighted indexes.
In a traditional market-cap weighted index, stocks are weighted in view of their market capitalization (all out market esteem), and that implies that bigger organizations impact the exhibition of the file. Goldman Sachs Smart Beta strategies, then again, utilize elective weighting strategies to make lists that attention on factors past market capitalization, like worth, unpredictability, energy, quality, and other basic or quantitative variables.
Goldman Sachs Smart Beta, in the same way as other monetary organizations, offers a scope of brilliant beta systems that financial backers can consider as a component of their portfolio. These strategies are designed to provide exposure to specific factors or investment themes that may offer potential benefits in terms of returns and risk management.
The particular systems and items presented by Goldman Sachs might develop over the long run, so it's prescribed to allude to their authority site or contact a monetary counselor for the most exceptional data on their brilliant beta contributions.
The Goldman Sachs Smart Beta portfolio as of now incorporates brilliant beta value ETFs for U.S. enormous capitalization, U.S. little capitalization, global created market, and worldwide developing business sector stocks, and the portfolio additionally incorporates brilliant beta fixed pay ETFs for venture grade corporate securities, high return corporate securities, worldwide securities, and expansion safeguarded securities.
Further detail regarding the ETFs included in the smart beta portfolio, and Goldman Sachs’ methodology for constructing its smart beta ETFs, can be found in the prospectuses drafted by the managers of those funds. Copies of those prospectuses are available in the portfolio tab of your account.
The ETFs in the Goldman Sachs Smart Beta portfolio may be less diversified than the ETFs for comparable asset classes in Betterment’s core portfolio because the smart beta ETFs may concentrate their investments in certain industries or groups of industries, or exclude certain securities that do not satisfy the factor criteria.
This may increase the risk of loss due to adverse economic, business, or other developments that affect those industries or companies. Reduced diversification also may increase the volatility of the smart beta portfolio relative to Betterment’s core portfolio.
Investors considering the smart beta portfolio should understand how it impacts the operation of Betterment’s tax loss harvesting feature. Betterment typically implements its tax loss harvesting feature by shifting allocations among three ETFs in each sub-asset class.
The Goldman Sachs Smart Beta portfolio uses only two ETFs for certain asset classes, which limits the functionality of tax loss harvesting for households with IRAs that have elected the smart beta portfolio for one or more goals. Additionally, electing the smart beta portfolio for one or more goals in your account while simultaneously electing a different portfolio for other goals in your account may reduce opportunities to harvest losses. See Betterment’s TLH disclosures for further detail.