Products April 9, 2003

Goldman Shutters Global Sector Funds

September 16, 2002 (PLANSPONSOR.com) - Goldman Sachs plans to shut down five sector funds whose returns - and asset levels - have disappointed.
Reported by

According to a regulatory filing on Thursday, Goldman says it is no longer accepting new investments in the five funds and will liquidate them on or about October 30, according to Reuters.

The closings are the latest in a growing trend of shuttering mutual fund offerings opened to tap into investor enthusiasm for an increasingly focused investment strategy. 

Too Little, Too Late?

The global sector funds, launched in early 2001, had combined assets of only about $17.6 million, according to Goldman Sachs. Estimates vary, but by traditional measures an individual fund needs at least $50 million to be profitable.
 
The Goldman Sachs funds to be closed are:

  • Global Consumer Growth Fund
  • Global Financial Services
  • Global Health Sciences
  • Global Infrastructure and Resources
  • Global Technology.

The funds are run by Goldman’s London-based international equity team, which manages several billion dollars in assets.  Offshore versions of the five global sector funds will remain open because they have enough assets to be viable, according to a company spokesperson cited in the Reuters report.

Sector Snapshot

The average sector mutual fund was down 25.4% this year as of Thursday, compared with a 21.3% loss for the average US diversified stock fund, according to research service Lipper.  However, Reuters notes that science and technology funds are down 44% year to date, while telecom funds are down nearly 46%, according to Lipper estimates.

Two other sector funds, the Internet Tollkeeper Fund and the Real Estate Securities Fund, will remain open, according to Goldman Sachs.

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