AI-focused ETF to be first European fund launched on Goldman platform

Financial Times

An artificial intelligence-focused exchange traded fund will on Thursday become the first ETF in Europe to be launched through a Goldman Sachs-run platform for small fund managers.

The AI-Enhanced Eurozone Equities Ucits ETF, managed by Germany’s Baader Bank and based on an investment strategy designed by Ultramarin, which specialises in AI-based forecasting models, will list on Frankfurt’s Xetra exchange.

The launch marks the first time a big-name financial institution has helped a European ETF issuer to bring a fund to market, a sign of the growing importance of the continent’s ETF industry, which recently passed $2tn in assets.

Goldman’s ETF Accelerator is similar to “white label” platforms designed to facilitate the launch of third-party funds that have proved popular in the US and made some headway in Europe.

These platforms allow smaller fund managers and new entrants to launch ETFs more quickly and cheaply than they could otherwise do, with the white labeller often providing services such as distribution, marketing, capital market support, custody, compliance, seed funding and administration. Goldman’s platform, which went live last year, currently hosts five US-listed ETFs with combined assets of $3bn.

“This is a massive milestone for our business to be able to demonstrate the ETF Accelerator’s global capabilities,” said Lisa Mantil, global head of the Goldman Sachs ETF Accelerator, who lauded the benefits of the Ucits fund structure, which can be distributed to more than 80 countries in Europe, Asia and Latin America.

The launch “really cements the fact that we are the only global service provider in the ETF space. This is our first [in Europe]. It absolutely will not be our last”, Mantil added.

“Our intention is to lower the barriers to entry for any investment manager that wants to get into the ETF space. I think we are going to see a lot more filings, a lot more launches, and that’s global.”

The white label market has taken off in the US, where platforms operated by the likes of Tidal Financial Group, Exchange Traded Concepts and Alpha Architect service several hundred ETFs.

Europe’s undisputed market leader is London-based HANetf, which currently offers 32 ETFs and other exchange traded products with combined assets of $4bn. A dozen more funds are lined up to launch in the near future, according to Hector McNeil, co-chief executive.

McNeil welcomed Goldman’s arrival in the European market. “I wish we would get a bit more competition. I want the industry to grow. When you are the only

The full article is available here. This article was published at FT Markets.