Goldman Sachs Asset Management has partnered with Black-led financial services firm Loop Capital to create two money market fund share classes supporting racial equity. A portion of the revenue from the share classes, available exclusively to clients of Goldman and Loop, will fund scholarships for Black women in science, technology, engineering, mathematics (STEM) and related fields.
The share classes are for Goldman’s two largest U.S. money market funds, the Goldman Sachs Financial Square Government Fund (LEIXX) and Goldman Sachs Financial Square Treasury Instruments Fund (LDIXX). Loop will distribute the share classes.
Google made an initial seed investment of $500 million in the funds.
“This launch with Google demonstrates our shared commitment to both partner with organizations like Loop Capital that are led by Black women and to create commercial solutions to advance racial equity,” said Margaret Anadu, global head of sustainability and impact for Goldman Sachs Asset Management, in a statement.
Could ETFs Lose Their Tax Advantage?
Retail investors could lose a key tax advantage from investing in exchange traded funds if congressional Democrats have their way, Bloomberg reports. Senate Finance Committee Chair Ron Wyden (D-Ore.) introduced draft legislation aimed at closing tax loopholes for the wealthy and mega-corporations.
Tucked away in the proposal is a provision that would end deferred taxes on capital gains linked to ETFs.
“The law exempts so-called regulated investment companies, or RICs, from recognizing a taxable gain on assets if shareholders are paid out ‘in kind,’” Bloomberg writes. “In other words, if withdrawing investors are paid in securities like stocks rather than in cash.”
Dave Nadig, chief investment officer and director of research of ETF Trends and ETF Database, wrote a piece this week referencing "Wyden’s folly" and what it will mean for advisors and the ETF industry. While Nadig says he is concerned, he points out that it’s just a discussion draft at this point, not legislation.
“As an advisor, however, there’s nothing for you to do here, really,” he writes. “Trying to predict specific changes in the tax code is even more pointless than predicting Fed moves. But if you’re at the edges of the industry? Time to add ‘852(b)6’ to your news filter. I suspect there will be a chance to make comments if this moves forward.”
Northern Trust Has a New CIO
Northern Trust Asset Management has hired Angelo Manioudakis, the former chief investment officer of Fidelity’s global asset allocation division, as its new CIO. Manioudakis replaces Robert Browne, who retired from the role in June.
Manioudakis joins from Lantern Harbor Investment Partners, a Boston-based global alternative investment firm he co-founded. He starts on Sept. 27, and will report directly to Northern Trust Asset Management President Shundrawn Thomas.
He’ll be responsible for investment performance, process and philosophy, and will chair the firm’s Investment Policy Committee.
French Firm Continues Investments in U.S.-based Asset Managers
Paris-based iM Global Partner, a global asset management firm that recently took an equity stake in New York–based ETF strategist Richard Bernstein Advisors, announced another investment this week in a U.S. asset management firm, as the firm continues toward global expansion. This time, the French firm has taken a 42% noncontrolling interest in Asset Preservation Advisors, an Atlanta-based municipal bond portfolio manager with about $4.8 billion in assets under management.
APA specializes in tax-exempt and taxable municipal bond portfolios for RIAs, family wealth offices, financial advisors and institutional clients. Under the deal, the firm will continue to operate independently.
The deal expands iM Global’s U.S. presence, which also includes Polen Capital, Dolan McEniry, Scharf Investments and Litman Gregory, in addition to Richard Bernstein.