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Goldman Sachs partners Source for ‘equity factor’ ETF
by Robert St George on Jan 27, 2014 at 09:31
Source has launched an exchange-traded fund (ETF) that will track a Goldman Sachs index based on ‘equity factors’.
The Source Goldman Sachs Equity Factor Index World Ucits ETF will contain a portfolio that emphasises five equity market factors: size, value, momentum, quality and low beta.
Quentin Andre, co-head of equity structuring and marketing for Europe, the Middle East and Africa at Goldman Sachs, explained: ‘Factor investing is nothing new. However, individual factor returns sometimes diverge significantly from established benchmarks and can add significant risk to a portfolio. To achieve consistent outperformance, diversification is key. We have selected five factors – all well-supported by academic research – and developed an index that delivers efficient, diversified exposure.’
Source’s chief executive Ted Hood added: ‘Academic research recognises the importance of combining equity factors but before this listing there was no way of harnessing their combined ability to deliver outperformance using an ETF.’
Listed on the London Stock Exchange, the ETF’s management fee is 0.65% per annum.