GSAM Repositions Fund for Higher Yield

The fund’s new investment objective is to provide income and capital appreciation. It seeks to meet this investment objective by investing in higher-yielding bonds and higher dividend-paying stocks.   

“Today’s low interest rate environment is driving investors to seek investments that offer attractive, consistent monthly income,” said Glen Casey, global head of Global Product Strategy and Development for GSAM. “Goldman Sachs Income Builder Fund is designed to access income opportunities across a broad set of asset classes. While the fund is focused on high-quality stocks and high-yield bonds in industries that may be less susceptible to market cycles, its flexible mandate allows it to invest in nontraditional asset classes, including non-U.S. securities, convertible bonds, preferred stock, REITs and MLPs.”   

The fund employs a baseline allocation of 50% to fixed-income securities and 50% to equity securities, with the flexibility to opportunistically tilt allocation up to 15% above or below the baseline toward either asset class. The fund will now pay dividend and interest income monthly, and its new benchmarks are the Russell 1000 Value and the BofA Merrill Lynch U.S. High Yield BB-B Rated Constrained Index.   

The fixed-income portion of the fund’s portfolio continues to be managed by GSAM’s Fixed Income team. The management of the equity portion has transitioned from the Quantitative Investment Strategies team to the Fundamental Equity team, which employs an active, bottom-up stock selection process.