Investor demand for exchange-traded funds is not slowing down, and firms without ETF offerings may risk losing business, according to one Goldman Sachs expert.
Steve Sachs, global chief operating officer of Goldman’s ETF Accelerator, notes that despite the time and resources required to launch an ETF, not offering current and new investment strategies as ETFs may prove even more costly.
“Any number of our clients would tell you, the opportunity cost of not [offering ETF products] is greater,” he recently told CNBC’s “ETF Edge.”
If a firm does not have ETF offerings, Sachs thinks “eventually those assets are going to leave and go to a competitor that does.”
To help clients through the process of launching their own ETF products, Goldman Sachs created its ETF Accelerator, a digital platform that helps clients launch, list and manage their own ETF products. The accelerator launched in 2022 in response to what Sachs described as significant client demand.
“Our core institutional clients were calling and asking, ‘How do we get into this ETF space? How do we deliver our strategy, active and otherwise, in an ETF wrapper?'” he said.
According to Sachs, client inquiries about launching ETFs surged following the passage of SEC Rule 6c-11 in 2019, which intended to help these funds launch more efficiently.
“While we wouldn’t call that a big boom, it was certainly a catalyst. The idea was it made it easier to launch an ETF, but it didn’t make it easy,” Sachs said. “At one point, we had more than 41 clients that had called us with exactly the same problem: ‘How do I do this, how do I move quickly and can you help us?'”
It can still take years to build the expertise, headcount and risk management framework necessary to launch an ETF, said Sachs. That is where Goldman’s accelerator platform aims to help.
“[It] allows our clients to come in, launch, list and manage their own ETF — but do it off of the technology, infrastructure and risk management expertise that Goldman’s known for and essentially get to market faster and cheaper than they could do it on their own,” Sachs said.
“GMO, Brandes [and] Eagle Capital all felt that the journey to build it on their own would be too expensive and too long,” Sachs said. “They didn’t want to miss the opportunity cost of not delivering their investment strategies in the wrapper.”
The Exchange Square Complex, which houses the Hong Kong Stock Exchange, on Feb. 26, 2025.
Bloomberg | Bloomberg | Getty Images
BEIJING — Chinese companies are jumping at a window of opportunity to go public in Hong Kong as global investors start to return to the region, following the news of DeepSeek’s artificial intelligence breakthrough in late January.
It’s a level of excitement that has not been felt for more than three years, despite the overhang of U.S. trade tensions. Initial public offerings are a lucrative way for early investors in startups to exit and reap a return.
“Everyone is working so perfectly together. IPO candidates, the investor and the regulators,” said George Chan, global IPO leader at EY. “All these three parties are working so perfectly at this moment to actually cultivate a healthy Hong Kong IPO market.”
“The U.S. long-term fund has returned. It shows investors are getting more confident [about] China,” he said, adding that post-IPO performance has also been encouraging.
News of China-based DeepSeek’s claims to rival OpenAI’s ChatGPT in reasoning capabilities at a lower cost — despite U.S. restrictions on Chinese access to advanced chips for training AI models — hit global tech stocks in late January, while spurring a rally in China. Hong Kong’s Hang Seng index surged to three-year highs.
Six initial public offerings in Hong Kong raised more than 1 billion Hong Kong dollars ($130 million) in the first quarter — a jump from just one listing of that size in the year-ago period — according to KPMG.
In all, the consultancy said, Hong Kong saw 15 IPOs in all of the first quarter which raised 17.7 billion HKD — the best start to a year since 2021.
There’s still a long way to go before recovering to that level. Hong Kong saw 32 IPOs in the first quarter of 2021 that raised a whopping 132.7 billion HKD, according to KPMG.
The Hong Kong stock exchange has adjusted its listing rules in the interim, including ones that support companies already listed in mainland China to offer shares in Hong Kong.
In addition to CATL, other companies listed in mainland China — Hengrui Pharmaceuticals, Mabwell, Haitian Flavoring and Food, Fortior Tech and Sanhua Intelligent Controls — are “actively seeking Hong Kong listings,” said Tiger Brokers, an underwriter of many Chinese companies’ IPOs in the U.S. and Hong Kong.
“Chinese regulators are encouraging companies to list in Hong Kong to broaden financing channels and support the outbound merger and acquisition needs of Chinese enterprises,” the firm said.
Still not out of the woods
Back in the summer of 2021, the fallout over Chinese ride-hailing company Didi’s IPO in the U.S. prompted both countries’ regulators to scrutinize what was then a wave of Chinese companies listing in New York.
The major issues have since been resolved and Beijing has clarified rules for Chinese companies wanting to list outside the mainland. But the Trump administration indicated in its “America First Investment Policy” that it could increase scrutiny on U.S. capital flowing to China, on top of heightened tariffs.
The U.S. and China have yet to indicate when their two leaders might meet in an attempt to forge a deal. A surge of interest in AI and tech are also not yet enough to speed up a recovery in China’s economy.
“At this point in time, all we can see is the good indicators,” EY’s Chan said. But “there could be one single incident happening which could pretty much reverse the trend.”
“Things tend to have a pattern,” he said. “If things can keep on for three months, four months, it will likely continue for the rest of the year.”
Treasury Secretary Scott Bessent speaks to reporters outside the West Wing after doing a television interview on the North Lawn of the White House on March 13, 2025 in Washington, DC.
Andrew Harnik | Getty Images
Treasury Secretary Scott Bessent said Wednesday the sell-off in the stock market is due more to a sharp pullback in the biggest technology stocks instead of the protectionist policies coming from the Trump administration.
“I’m trying to be Secretary of Treasury, not a market commentator. What I would point out is that especially the Nasdaq peaked on DeepSeek day so that’s a Mag 7 problem, not a MAGA problem,” Bessent said on Bloomberg TV Wednesday evening.
Bessent was referring to Chinese AI startup DeepSeek, whose new language models sparked a rout in U.S. technology stocks in late January. The emergence of DeepSeek’s highly competitive and potentially much cheaper models stoked doubts about the billions that the big U.S. tech companies are spending on AI.
The so-called Magnificent 7 stocks — Apple, Amazon, Tesla, Alphabet, Microsoft, Meta and Nvidia — started selling off drastically, pulling the tech-heavy Nasdaq Composite into correction territory. The tech-heavy benchmark is down about 13% from its record high reached on December 16.
However, the secretary downplayed the impact from President Donald Trump’s steep tariffs, which caught many investors off guard and fueled fears of a re-acceleration in inflation, slower economic growth and even a recession. Many investors have blamed the tariff rollout for driving the S&P 500 briefly into correction territory from its record reached in late February. Wall Street defines a correction as a drop of 10% from a recent high.
S&P 500, YTD
Trump signed an aggressive “reciprocal tariff” policy at the White House Wednesday evening, slapping duties of at least 10% and even higher for some countries. The actions sparked a huge sell-off in the stock market overnight, with the S&P 500 futures declining nearly 4% and the blue-chip Dow Jones Industrial Average shedding 1,100 points. The losses will likely but the S&P 500 back into correction territory in Thursday’s session.
“It’s going to be fine if we put the best economic conditions in place,” Bessent said in a separate interview on Fox Wednesday evening. “If you go back and look, the stock market actually peaked on the [DeepSeek] Chinese AI announcement. So a lot of what we have seen has been just an idiosyncratic tech sell-off.”
A Newsmax booth broadcasts as attendees try out the guns on display at the National Rifle Association (NRA) annual convention in Houston, Texas, U.S. May 29, 2022.
Callaghan O’hare | Reuters
Shares of conservative news channel Newsmax plunged more than 70% on Wednesday as its meteoric rise as a new public company proved to be short-lived.
The stock tumbled a whopping 72% in afternoon trading, following a 2,230% surge in Newsmax’s first two days of trading after debuting on the New York Stock Exchange. At one point, the rally gave the company a market capitalization of nearly $30 billion — surpassing the market cap of legacy media companies like Warner Bros. Discovery and Fox Corp.
Newsmax was listed on the NYSE via a so-called Regulation A offering, instead of a traditional IPO. Such an offering allows small companies to raise capital without undergoing the full SEC registration process. The primary focus is to sell to retail investors, in this case It was sold to approximately 30,000 retail investors.
The public offering indeed garnered the attention from retail traders, some of whom touted the stock as the “New GME” in online chatrooms. GME refers to the meme stock GameStop, which made Wall Street history in 2021 by its speculative trading boom.
Newsmax has a small “float,” or shares available for trading. Less than 6% of Newsmax shares, or 7.5 million shares out of a total of 128 million fully diluted shares, are available for public trading.
The conservative TV news outlet has seen its ratings rise with the election of President Donald Trump and other prominent Republicans — although it still falls behind the dominant Fox News. Overall, Newsmax ranks in the top 20 among cable network average viewership in both prime time and daytime, Nielsen said.