TT on Goldman 0-1 Year ETF
Treasury Today writes "Goldman brings ETFs to the cash investor." The article says, "In today's lower rate environment and with new regulation just around the corner, treasurers who favour money market funds (MMFs) as a place to park cash are now being forced to seek alternatives. Asset managers are responding by ramping up their liquidity offerings. New short-term investment products are now fast emerging; some of which may, at first, seem quite alien to many cash investors. Take, for example, The Goldman Sachs TreasuryAccess 0-1 Year ETF (Ticker: GBIL) launched by Goldman Sachs Asset Management (GSAM) earlier this month. The new fund, which began trading on NYSE Arca on 8th September is the first ETF to offer same-day settlement of creation and redemptions in the short-term US treasury market. Unlike other ETFs, traditionally marketed to investors with longer investment horizons, this is a product evidently developed with corporate cash investors very much in mind." GSAM's Christina Kopec tells Treasury Today, "In the US we have seen investors moving en masse into government money market funds and we have been getting a lot of questions about what else is out there that can offer incremental yield on excess cash.... One of the gaps we observed was that the settlement cycle [for other ETFs] was T+3, something we knew would be incompatible for many institutional cash clients. Sometimes T+1 can work, but most cash investors are accustomed to funds offering daily liquidity." The piece adds, "But it does beggar the question, of course, of why this has not been done before? It is not, Kopec explains, because it is inherently difficult to design an ETF with daily liquidity. It is simply a case of new regulation and market environments creating a demand that previously didn't exist." (See also our Sept. 19 Link of the Day, "New Goldman Treasury Cash ETF," and our July 1 LOTD, "Invesco ETF of Govt MMFs.")
