The offerings are a diverse group, and include the Goldman Sachs (GS) Emerging Markets Equity ESG Portfolio, the GS Global Millennials Equity Portfolio, the GS Global Real Estate Equity Portfolio and the GS Absolute Return Tracker Portfolio.
GSAM applied to the Monetary Authority of Singapore (MAS) for authorisation to sell the products to retail investors in December last year. Previously, the funds were only available to accredited private banking and institutional investors, and they remain unauthorised by the Securities and Futures Commission for sale to Hong Kong retail investors.
“The latest additions will provide [retail] investors [in Singapore] access to thematic equity funds and alternatives which will offer diversification benefits amidst global market volatility and changing investment trends,” said Jessica Jones, head of GSAM’s Asia Pacific ex-Japan retail client business in a statement.
GSAM’s total number of retail-registered funds in Singapore is now 22, which include developed and emerging market equity products across a range of capitalisations, sectors and geographies, and also fixed income products with different credit quality mandates, as well as multi-asset funds.
Among the new fund launches, Kathryn Koch, co-head of fundamental equity at GSAM, highlighted the ESG and Millennial products.
“We believe integrating material ESG factors into an investment decision making process is a crucial driver of better long term risk-adjusted returns. This is especially true across emerging markets, where information and disclosure is still limited,” she said.
The GS Emerging Markets Equity ESG Portfolio was first made available in Europe in September 2018, and has since posted a cumulative return of 18.87%, double the average return of its sector peers (8.51%), and outperforming its benchmark MSCI Emerging Markets index (9.18%) as well as the MSCI Emerging Markets ESG Universal index (10.25%), according to FE Fundinfo data.
The portfolio has slight overweight exposure to China, India, South Korea and Russia, and its top five holdings include Tencent, Alibaba, Taiwan Semiconductor Manufacturing, Samsung Electronics and AIA, according to the fund’s most recent fact sheet.
The other three funds are more seasoned, with the $274m GS Global Millennials Equity Portfolio standing out for its performance, having generated 58.64% cumulative return over three years, albeit with annualised volatility of 12.64%.
“Thematically, one of the global mega trends that most excites us currently is the rise of the
millennial consumer – we believe targeting companies that benefit from the rising wealth and changing habits of the millennial generation can drive superior long term returns,” said Koch.
The fund has large allocations to growth sectors, such as communication services, information technology, consumer discretionary and healthcare, and half of its exposure is to North America – although two of its biggest individual holdings are Tencent and Taiwan Semiconductor Manufacturing.
GS Global Millennials Equity Portfolio Allocations
Source: Fund Factsheet, December 2019
Other investment firms have also been keen to burnish both their millennial-friendly “new economy” and ESG credentials in Asia.
Earlier this month, Capital Group teamed up with DBS to distribute its $22.7bn New Economy strategy in Singapore, and last year Pictet promoted three multi-billion dollar security, digital and robotic funds. Also in 2019, Value Partners, launched a technology-focused multi-asset product, UOB Asset Management marketed a“Global Innovation Fund” in Singapore and Nikko Asset Management, which offered a “Disruptive Innovation Fund”.
Meanwhile, several emerging-market ESG-labelled products were launched in Singapore last year.
They include four emerging market ESG bond funds managed by Blackrock, and an emerging market corporate bond ESG product managed by M&G.
In contrast, the GS Global Real Estate Equity Fund is more conventional. It was originally launched in 2016, but has only attracted $54m of assets. It has generated a three-year cumulative return of 20.59%, which is less than its sector average of 31.53%.
Its holdings are spread across a wide range of property categories, with its largest overweight (compared with its FTSE EPRA Nareit Developed index benchmark) to the retail sector, and an overweight allocation to Asia and underweight position in North Amercia.
The GS Absolute Return Tracker Portfolio is the largest of the four new funds available to the Singapore mass market, with AUM of $851m.
According to its factsheet, the fund is designed for investors who are looking to gain access to the return characteristics of a diversified portfolio of trend, equity long-short, macro, relative value and event driven hedge funds strategies, which aim to generate positive returns which are lowly correlated to the broad bonds and equity markets.
At the end of last year, its allocations were: 46.4% equity long-short, 26.9% macro, 20.0% relative value and 6.7% event driven.
However, it has been the worst performer of the four funds, achieving only a 14.44% three-cumulative return — but it has also been the least volatile, with a three-year annualised volatility of just 4.45%.
Goldman Sachs new fund launches in Singapore
| GS fund |
3-year cumulative return |
3-year annualised return | 3-year annualised volatility | Alpha |
Information ratio |
| Absolute Return Tracker Portfolio |
14.44% |
4.60% | 4.45% | 3.24 |
0.76 |
| Global Millennials Equity Portfolio |
58.64% |
16.63% | 12.64% | 5.74 |
1.15 |
| Global Real Estate Equity Portfolio |
20.59% |
6.44% | 8.72% | -0.56 |
-0.37 |
| *Emerging Markets Equity ESG Portfolio |
18.97% |
12.77% | 16.53% | 6.15 |
1.35 |
Source: FE Fundinfo. Data in US dollars. *data since initial fund launch on 27 September 2018
Goldman Sachs funds’ performance vs sector averages
