A decline in its Process Pillar rating is the primary driver of Goldman Sachs Access Hi Yld Corp Bd ETF's downgrade to a Morningstar Medalist Rating of Neutral from Silver. The portfolio maintains a sizable cost advantage over competitors, priced within the cheapest fee quintile among peers.  

 The strategy’s management team earns an Average People Pillar rating. The strategy earns an Average Process Pillar rating. Independent of the rating, analysis of the strategy's portfolio shows it has maintained a significant overweight position in corporate bonds and BB rated bonds compared with category peers. The strategy's parent organization earns the firm an Average Parent Pillar rating. People Pillar and Parent Pillar ratings for this strategy are indirectly assigned by a Morningstar analyst rather than algorithmically derived. Please see the notes following each pillar section for more details. The details of assigning methods can be found in each pillar section.

Analyst Rating

Morningstar's style-agnostic investment process evaluation looks for strategies that should be able to outperform their Morningstar Category index on a risk-adjusted basis over time. Goldman Sachs Access Hi Yld Corp Bd ETF earns an Average Process Pillar rating.    The main driver of the rating is that this fund tracks an index. Historical data, like Morningstar's Active/Passive Barometer, finds that passively managed funds have generally outperformed their active counterparts, especially over longer time horizons. Low expenses across its parent firm's funds, whose fees, on average, rank in the middle quintile of their respective category, also influence the rating. The pattern of low fees at the firm suggests that it is focused on delivering strong results for investors. Lastly, the process is limited by the fund's weak long-term risk-adjusted performance. This can be seen in its five-year alpha calculated relative to the category index, which suggests that the process has struggled over that period.

 Compared with other funds in the High Yield Bond Morningstar Category, this fund consistently holds a significantly smaller cash position over the past few years. But in terms of long-term interest-rate sensitivity, it does not have a portfolio bias and hews closely to peers. 

 This strategy's 12-month yield is 6.3%, which mirrors its average peer. It also has a 7.2% 30-day SEC yield (a measure similar to yield-to-maturity). The portfolio's average surveyed credit quality is on par with peers, with both the fund and the average being rated B.

Average

Process

Goldman Sachs’s team is valuable but does not stand out as one of the industry's best, warranting an Average People Pillar rating. There are two managers listed on the fund: Todd Henry, David Westbrook. The team is well equipped, with an average of 10 years of portfolio management experience. Together, they manage a total of eight strategies, with mixed prospects. The asset-weighted average Morningstar Medalist Rating across the strategies is Neutral. This means, in aggregate, they are not positioned to deliver positive alpha relative to the category median.  

 Note: This People Pillar rating is indirectly assigned by an analyst. Morningstar analysts evaluate the People Pillar for passive products at the brand level and may also differentiate by asset class. There is at least one other passive strategy at the firm that is covered by a Morningstar analyst, so the People Pillar rating of the fund is inherited from the rating that the Morningstar analyst assigned to investment vehicles under the same brand name.

People

Goldman Sachs Asset Management heads into an uncertain direction on multiple fronts, underpinning its Average Parent rating.
GSAM has long struggled with personnel turnover, with a steady degree of analyst departures and additions coinciding with leadership reshufflings over the past few years that includes the September 2022 departure of equity head Katie Koch. Meanwhile, parent company Goldman Sachs elected to merge its asset management and wealth management units in October 2022, reversing a decision to split them in 2020, and assigned Marc Nachmann to lead the unit. Although he is a longtime Goldman veteran, most of his prior experience has been with the firm’s investment bank. Potentially complicating his remit is the firm’s December 2021 acquisition of NN IP, whose traditional and sustainable-investing branches could add capabilities but will take time to integrate. Bolstering the firm’s sustainability credentials could be especially pressing given the SEC’s November 2022 fining of GSAM for past failings in its ESG-related operations. 
GSAM has some strengths worth highlighting. Portfolio-manager ownership statistics across the firm’s U.S. lineup have improved dramatically since the firm instituted a deferred compensation program of fund shares in early 2020, and GSAM has compelling capabilities within its quantitative equity franchise.

Parent

GS ETF Trust Shs Access High Yield Corp Bond Fund

GHYB tracks a broad-maturity, USD-denominated, high-yield corporate bond index selected by debt service and leverage.

GHYB tracks a broad-maturity, USD-denominated, high-yield corporate bond index selected by debt service and leverage. The underlying index includes US and Canada domiciled bonds.

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