Goldman Sachs Acs Infl Protd USD Bd ETF’s management team is rated Average, but a solid investment process still helps this strategy retain its Morningstar Medalist Rating of Silver. The portfolio maintains a sizable cost advantage over competitors, priced within the cheapest fee quintile among peers.  

 The strategy's sensible investment philosophy merits an Above Average Process Pillar rating. Independent of the rating, analysis of the strategy's portfolio shows it has maintained a significant underweight position in AA rated bonds and an overweight in government bonds compared with category peers. The strategy’s management team earns an Average People Pillar rating. 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 evaluation of this fund's process aims to determine how repeatable, consistent, and reliable it is, and whether management maintains a competitive advantage. Goldman Sachs Acs Infl Protd USD Bd ETF earns an Above Average Process Pillar rating.    The primary contributor to 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. Strong risk-adjusted performance also influences the rating. This can be seen in the fund's five-year alpha calculated relative to the category index, which suggests that the managers have shown skill in their allocation of risk. Lastly, the process is limited by the parent firm's five-year risk-adjusted success ratio of 51%. The measure indicates the percentage of a firm's funds that survived and outperformed their respective category's median Morningstar Risk-Adjusted Return for the period. The parent's subpar success ratio suggests that the firm could do better across its fund lineup.

 Compared with other funds in the Inflation-Protected Bond Morningstar Category, this fund takes on significantly lower credit risk. But in terms of long-term interest-rate sensitivity, it hews closely to its average peer. Opening the analysis to additional factors, the portfolio has displayed three biases over time, whether towards or away from certain fixed-income instruments. Compared with the average strategy in the category, the managers have been significantly underweight AA rated bonds. Additionally, the managers have exhibited a notable sector bias toward government bonds. And finally, the fund leans toward debt with seven- to 10-year maturities.

 This strategy's 12-month yield is 2.3%, lower than its average peers' 4.4%. Plus, its 30-day SEC yield (a measure similar to yield-to-maturity) sits at 8.4%. While a lower yield may deliver less income, it also tends to indicate lower credit risk. The portfolio holds assets with a higher average surveyed credit quality of AAA, compared with the category average of A, and it holds no non-investment-grade assets, despite the average peers' 1%. Lower-credit-risk strategies are often able to navigate bear markets more effectively.

Above Average

Process

Goldman Sachs’s team is good but unexceptional, earning the strategy an Average People Pillar rating. There are two managers listed on the fund: David Westbrook, Todd Henry. Experience on the team is abundant, with 10 years of average portfolio management experience. Together, they manage a total of eight strategies, with an asset-weighted average Morningstar Medalist Rating of Neutral. This means, in aggregate, the team falls short and will struggle to produce 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.

Average

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

Goldman Sachs Access Inflation Protected USD Bond ETF

GTIP tracks an index of off-the-run US Treasury inflation-protected securities with at least one year remaining in maturity.

Goldman Sachs TreasuryAccess 0-1 Year ETF

GS ETF Trust Shs Access High Yield Corp Bond Fund

Goldman Sachs Access Investment Grade Corporate Bond ETF

Goldman Sachs Access Ultra Short Bond ETF

As we consider risks in the fixed income markets today, investors can turn to smart beta bond exchange traded fund strategies to better position for the unusual environment. In the recent webcast, Fixed Income is Back.

A Smart ETF Approach to Bond Markets Today

Many investors and analysts fear that the Federal Reserve's plan to fight inflation through aggressive rate hikes will push the U.S. economy into a recession.

Protect Against Sky-High Inflation With This Unconventional TIPS Fund

VanEck Investment Grade Floating Rate ETF

Vanguard Short-Term Inflation-Protected Securities ETF

The month of July saw the consumer price index rise 0.6%, which may make fixed income investors more aware of what inflation will do in the coming months. With that in mind, fixed income investors can use options to protect their return on bonds if inflation keeps ticking higher.

Investors Can Keep This ETF in Their Back Pocket if Inflation Rises

IQ Real Return ETF

With oil prices seemingly in the gutter, a bounce is likely expected, but for now, the commodity is causing inflationary expectations to take a back seat.

Oil Could Seal the Fate of TIPS Investors in the Short Term

When looking at optimal fixed-income allocations, financial advisors are considering ways to incorporate ETFs to diminish overall portfolio risks better and enhance yield generation. “When you think about the returns that global fixed-income has produced over the last call-it five-years, it’s not normal, right?

News for Goldman Sachs Access Inflation Protected USD Bond ETF ETF (GTIP)