During the last quarter of 2009, two major players in the financial services industry tossed their hats into the ETF ring, as both T. Rowe Price and Goldman Sachs filed 40-APP forms with the Securities and Exchange Commission. 40-APP filings clear the regulatory way for a firm to launch an ETF, and are the first steps in launching an ETF family.
In early December, T. Rowe Price asked the SEC for approval to launch a family of actively managed ETFs, including U.S. equity, global equity and fixed-income funds. That bombshell was followed by a Christmas Eve filing from Goldman Sachs that requested broad relief from the SEC to launch a variety of funds, including equity, fixed-income and blended portfolios.
Although both firms are known for their actively managed strategies, only T. Rowe indicates that it will be focusing on actively managed funds—Goldman’s filing only mentions index-based ETFs. However, unlike T. Rowe, Goldman is not a complete stranger to the ETP world: It is the issuer of the GS Connect S&P GSCI Enhanced Commodity ETN (NYSE Arca: GSC), which has more than $60 million in assets, a reasonably sizable amount for an ETN.
Both firms are looking to follow other big financial services names into the now-established ETF industry. The leap has already been made by such luminaries as Charles Schwab, Old Mutual and Pimco. With assets under management of $366 billion and $871 billion, respectively, T. Rowe and Goldman are clearly equipped to play with the big dogs—the real question is whether any of these firms will be able to mount a serious threat to established ETF issuers like iShares, Vanguard and State Street Global Advisors.
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