Published January 18, 2013
A new lineup of exchange-traded funds (ETFs) that manage risk and use momentum strategies has been introduced by ALPS Advisors.
Unlike traditional equity index funds, the latest ETFs from ALPS will shift assets based upon factors like historical volatility and market correlations. The funds use benchmarks developed by Goldman Sachs (GS).
"ALPS is excited to introduce ETFs based on the Goldman Sachs indices to our suite of ETFs" said Tom Carter, Executive Vice President of ALPS Holdings.
The new ALPS/GS Momentum Builder and risk managed funds are the following:
--ALPS/GS Momentum Builder Growth Markets Equities and US Treasuries Index ETF (GSGO)
--ALPS/GS Momentum Builder Multi-Asset Index ETF (GSMA)
--ALPS/GS Momentum Builder Asia ex-Japan Equities and US Treasuries Index ETF (GSAX)
--ALPS/GS Risk-Adjusted Return US Large Cap Index ETF (GSRA)
Three of the new ETFs tracking the "GS Momentum Builder" model attempt to capture momentum exposure to multiple asset classes using a risk control mechanism. The funds use a systematic trading strategy that dynamically allocates across a basket of assets based on historical price momentum and volatility.
The fourth ETF, GSRA aims to mimic stocks with the highest risk-adjusted returns using 12-month volatility-adjusted consensus price targets for the stocks in the Russell 1000 index.
"This collaboration helps us achieve our shared goal of providing ETF investors with thoughtful index-based investment alternatives with various types of market exposures" said Federico Gilly, managing director and head of the Equity Sales Strats and Structuring Group at Goldman Sachs.
Goldman Sachs' New York-based Exchange Traded Product Structuring team, which is part of the firm's Securities Division, specializes in creating indices for a wide range of investor classes.
GSRA charges 0.55% annually while the other ALPS/GS ETFs charge 0.68%.
Dividends for the ALPS/GS ETFs are paid quarterly.
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