Goldman Sachs Launches ESG-Focused Muni Bond ETF

Goldman Sachs Asset Management has launched the Goldman Sachs Community Municipal Bond ETF, which aims to maximize tax efficiency by providing exposure to investment-grade, tax-exempt municipal securities.

The ETF will track the Bloomberg Goldman Sachs Community Municipal Index and has screens for social and environmental factors. By focusing on one- to 15-year maturities, the portfolio aims to deliver diversified market exposure with lower duration and higher credit quality.

Investors’ ESG priorities would be met by the fund’s targeted allocation into “municipalities and projects with positive impact such as in education, healthcare, clean energy, and more community related initiatives,” according to the prospectus.

The ETF has an expense ratio of 0.25%.

The launch comes as ESG investments have been hit hard, in part, by political divisiveness on the issue. ESG-labeled funds lost $2.1 billion in the fourth quarter of 2022, compared with $6.1 billion of inflows in the same period a year ago, according to data from research firm Strategas Securities.  Year to date, ESG ETFs have lost more than $700 million, according to Bloomberg data.