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Goldman Finally Gets ETFs Right

Goldman Finally Gets ETFs Right

If at first you don't succeed ... | Copyright Chris Hondros, Getty Images

There has been plenty of press about Goldman Sachs’ entry into the ETF market. Most of it notes that Goldman is late, but coming in large, with its proposed slate of new funds, a handful of factor-based strategies which they call “ActiveBeta” at rock-bottom prices to attract funding. (The U.S. large cap fund will charge a mere 9 basis points.) But, as ETF-watcher Ron Rowland notes, this is not the first time Goldman Sachs has been involved with launching exchange-traded products; an enhanced commodity fund launched in 2006 got up to $124 million, then became a “broken product” when Goldman stopped issuing shares in June. Goldman launched Claymore’s CEF Index fund in 2007 – that too failed to gain traction. This time is different, Rowland writes. “This is Goldman’s fourth attempt, and this time it looks like they are taking it more seriously by being the sponsor, the index provider, and offering aggressive pricing.”

Catholic Values

Peace be with you. | Copyright Spencer Platt, Getty Images

After a large number of client requests, Morgan Stanley has introduced new guidelines to help advisors build portfolios that take into account the Catholic Church’s teachings. Called the Catholic Values Investing Tool Kit, the framework provides advisors with a map to customize portfolios that align with faith-based goals, such as supporting companies that provide access to affordable housing or operate under high environmental standards, while avoiding those that participate in discrimination, predatory lending or other activities inconsistent with Catholic values. “While financial value remains a key focus, Catholic-values investment portfolios also seek to protect and promote the unique values and mission of faith-based investors,” says Lily Scott, director of investing with impact for Morgan Stanley Wealth Management. Spokeswoman Christine Jockle said Friday the Catholic version was the first in a series that will eventually include other faiths.

Target Date Fund Mistakes

Aim high. | Mark Airs/iStock/Thinkstock

While target date funds are easy tools for hands-off investors, there are plenty of pitfalls. Scott Dingwell of BlackRock looks at two such mistakes investors can make with target date funds. Using multiple ones, and mixing them up along with other investments. Dingwell writes that while investors may believe multiple target date funds pull from different investments, they really just apply different weights to the same investments at different ages. In addition, while a diverse portfolio is preferable, Dingwell suggests that's not the case with a 401(k). "It may defeat the target date fund’s engineering to supplement it with other asset classes," he writes. "Or, if you really do feel that you have unique investment needs, you may be better of using a managed account or advice provider to build a custom portfolio."

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