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Goldman's Biggest ETF Customer Readies Its Own Rival Funds

  • Insurance firm plans four multifactor, two fixed income ETFs
  • More asset managers pursue strategy targeting existing clients
Goldman Sachs Group Inc. headquarters in New York on Jan. 18, 2012.
Photographer: Jin Lee/Bloomberg

The largest outside buyer of Goldman Sachs Group Inc.’s exchange-traded funds might soon become its biggest competitor.

That client is USAA Capital Corp., an early adopter of the latest trend in the $619 billion smart beta industry: multifactor funds. The rules-based ETFs buy stocks that exhibit multiple characteristics -- like low volatility or cheap valuations -- that have been shown to beat the market over time.