Press Releases

Goldman Sachs Enhances Direct Indexing Strategy With ETF Look Through Feature

May 29, 2025 | 4 minute read

NEW YORK, [May 29, 2025] – Goldman Sachs Asset Management, the largest SMA asset manager in the US1,  today announced the introduction of ETF Look Through, a new feature on its flagship Goldman Sachs Tax-Advantaged Core Strategies (TACS).  The new feature is initially available to the Registered Investment Advisor (RIA) channel.

Investors who move eligible equity ETFs into a GSAM direct indexing account can benefit from tax-efficient diversification and holistic risk management. ETF Look Through enables the portfolio management team to actively monitor the risk/tax tradeoff of ETF positions at the investor level, where each solution is custom tailored to each client.

The new feature allows advisors to combine eligible ETFs their clients hold and manage them in a tax efficient manner in a single advisory account. With ETF Look Through, GSAM can rebalance the portfolio to diversify around the underlying holdings of the eligible ETFs.

Monali Vora, Global Head of Wealth Investment Solutions at Goldman Sachs Asset Management said, “Advisors have looked to us for 25 years to risk manage and diversify individual stocks tax efficiently. As their clients’ ETF exposure grew, their direct feedback to us was that they want us to consider current ETF exposure and tax consequences when merging their equity assets. We are excited to enhance our capability to now consider eligible ETF holdings to more holistically manage risk and tax efficiency for our clients, customized at the individual account level."

GSAM enhanced their portfolio management process to “look through” to ETF underlying holdings to understand the stock, sector and risk of the underlying constituents in the ETF. The team will then determine whether to manage, trim or sell existing ETF positions based on exposures and risk of the ETF’s underlying constituents and the tax considerations of reducing ETF exposure. The analysis also incorporates underlying ETF fees with the goal of reducing fees over time. 

The new capability considers many factors when deciding when to hold, trim or sell ETF positions. SMAs will not hold 100% ETFs, so some eligible ETFs may be sold. ETF positions with relatively lower tracking error to the SMA benchmark and relatively higher appreciation are more likely to be held. Conversely, ETF positions with higher tracking error and lower appreciation are more likely to be sold.

The Goldman Sachs Tax-Advantage Core Strategies aim to deliver market-like exposure with a range of tax management capabilities to help investors keep more of what they earn. A leader in direct indexing, Goldman Sachs Asset Management’s track record of consistently enhancing after-tax returns for investors and partnering with their financial advisors to deliver tailored solutions spans over 25 years. As of December 31, 2024, the firm has $411 billion in Separate Managed Account (SMA) AUS and $191 billion in direct indexing AUS.

About Goldman Sachs Asset Management

Goldman Sachs Asset Management is the primary investing area within Goldman Sachs (NYSE: GS), delivering investment and advisory services across public and private markets for the world’s leading institutions, financial advisors and individuals. The business is driven by a focus on partnership and shared success with its clients, seeking to deliver long-term investment performance drawing on its global network and deep expertise across industries and markets. Goldman Sachs Asset Management is a leading investor across fixed income, liquidity, equity, alternatives, and multi-asset solutions. Goldman Sachs oversees $3.2 trillion in assets under supervision as of March 31, 20252. Follow us on LinkedIn.

 

1 Source: Cerulli Edge, US Managed Accounts Report

2 Assets Under Supervision (AUS) includes assets under management and other client assets for which Goldman Sachs Asset Management does not have full discretion.

 

 

Related Tags
Back to top
Risk considerations and disclosures

The TACS strategy and ETF Look Through feature are subject to risk, certain of which are described below. You should understand all the risks of the strategy before investing.

Transferring an ETF to TACS account(s) will result in the position being charged the advisory fees and any additional costs, which may be higher than the historical advisory fees and costs associated with the position. Investors will also continue to pay the underlying ETF fees and costs, including operating costs and investment management fees, in addition to the advisory fees and costs associated with TACS accounts.

The scope of eligible ETFs is subject to change periodically and without notice, with ineligible ETFs either being liquidated upon funding or not accepted into TACS accounts. Generally, eligible ETFs will include a subset of broad and/or sector-based equity only ETFs while ineligible ETFs will include, but are not limited to, all actively managed, non-equity, multi-asset, hedged, levered and/or GSAM managed ETFs.

GSAM will determine whether to hold or sell (in part or fully) eligible ETFs and/or otherwise manage those positions alongside individual equity positions based on a variety of factors, including the ETF’s level of appreciation, current tax holding period (short-term or long-term), associated fees, and overall risk profile relative to target exposure. Subject to certain thresholds, GSAM may also liquidate eligible appreciated ETFs and realize taxable gains in the process, seeking to deliver a tax loss harvesting benefit over time.

Given ETFs are pooled vehicles and represent multiple underlying individual equity positions, TACS accounts that have assets allocated across eligible ETFs will generally have fewer tax loss harvesting opportunities relative to TACS accounts where those assets are directly allocated across individual equity positions.

The overall performance of TACS accounts that hold eligible ETFs will be impacted by the investment management, performance, and policies of those ETFs. As a result, their performance would vary, positively or negatively, compared to TACS account(s) that hold different or no eligible ETFs.

Tax Considerations: The strategy may result in adverse tax consequences for the client including, but not limited to, wash sales.

It is the responsibility of the custodian, administrator or such other third party appointed by the client, to obtain accurate and reliable information concerning the valuation of any securities which are comprised in the portfolio. Broker tax reporting to clients may not identify all transactions that could be viewed as a wash sales. It is the responsibility of the client’s independent tax advisor to identify wash sales in the client’s portfolio. All clients are strongly urged to discuss the tax implications of any transactions, including any potential wash sales, with their independent tax adviser.

Goldman Sachs does not provide legal, tax or accounting advice, unless explicitly agreed between you and Goldman Sachs (generally through certain services offered only to clients of Private Wealth Management). Any statement contained in this presentation concerning U.S. tax matters is not intended to be used and may not be used for the purpose of avoiding penalties imposed on the relevant taxpayer. Investors should be aware that a determination of the tax consequences to them should take into account their specific circumstances and that the tax law is subject to change in the future or retroactively and investors are strongly urged to consult with their own tax advisor regarding any potential strategy, investment or transaction.