VIDEO: ETF of the Week: GIGL

On this episode of the “ETF of the Week” podcast, VettaFi’s Head of Research, Todd Rosenbluth, discussed the Goldman Sachs Corporate Bond ETF (GIGL) with Chuck Jaffe of Money Life. The pair discussed several topics related to the fund to give investors a deeper understanding of the ETF.

Chuck Jaffe: One fund, on point for today. The expert to talk about it. Welcome to the ETF of the Week! 

Yes, this is the ETF of the Week, where we examine trending, new, newsworthy, unique, and intriguing exchange-traded funds with Todd Rosenbluth. He’s the head of research at VettaFi. And if you go to VettaFi.com, you will find all the tools you need to not only research the funds we talk about here, but to make yourself a better, savvier investor in ETFs.

Todd Rosenbluth, it’s great to chat with you again!

Todd Rosenbluth: It’s great to be back.

Chuck Jaffe: Your ETF of the Week is…

Todd Rosenbluth: The Goldman Sachs Corporate Bond ETF, ticker GIGL.

Chuck Jaffe: Giggle! GIGL, the Goldman Sachs Corporate Bond ETF. And you know, people will hear Goldman Sachs, they’ll think old-line company. But this is not an old-line fund. This is a fairly new fund. So, why this fund now?

Todd Rosenbluth: You’re right. So, this is a year where we’ve seen asset managers bring some of their best ideas into the ETF space through active management, and fixed income ETFs have been a key area for that. And that’s what Goldman Sachs has done. 

GIGL or “giggle” — we might as well say that out loud every once in a while — is a great example of it. This is the best of Goldman from an active management standpoint, focused on an area of the marketplace that has been very popular. Corporate bond spreads have tightened this year, earnings trends are quite strong. There’s optimism; people are trying to figure out how they navigate the fixed income universe.

And they can lean on a firm like Goldman Sachs to be able to help them out. And we’ll talk about some of the benefits of it being actively managed. But we think this is a great fund to focus on. And we at VettaFi are going to be talking about it at an upcoming symposium on December 9. Goldman Sachs is going to be one of our partners for that. We wanted to get the word out in advance.

Chuck Jaffe: Why particularly this fund? Because it’s not like there aren’t corporate bond funds and active corporate bond funds out there from established money management firms. So, why this fund? And is this fund bringing over a great track record as a conversion, or as they made the change to become an ETF, did they tweak things up at all?

Todd Rosenbluth: So no, this is a new ETF. This is not a conversion of an existing strategy. And you’re right, there are some other actively managed corporate bond ETFs. This caught my eye because it launched this year, because it’s Goldman Sachs that has been gaining market share as an active ETF provider. And to me, one of the benefits of an active approach with corporate bonds is you get a manager that helps to navigate the universe, instead of an index-based approach that iShares or Vanguard or State Street has, which just replicates the index.

This takes valuation into account, and there’s also the flexibility for this fund to invest in some bonds that are below-investment-grade, that perhaps there’s a chance for being upgraded, which is a key opportunity. So, with index-based corporate bond ETFs, you tend to find that they own nothing but investment-grade corporate bonds. But I like the fact that this fund has some flexibility. And you’ve got the experts at Goldman that are helping to sort through that universe.

Chuck Jaffe: There are two things that have to come up anytime we’re going to talk about an actively managed bond fund, and one is expense ratio, because although we know that expenses do not necessarily make the difference, there’s always that: Is it worth it to pay for active management? This fund out of the box has a pretty good expense ratio, right?

Todd Rosenbluth: That’s right. So, 29 basis points is the expense ratio, so Goldman is bringing its scale to help support the overall fund. We tend to find that with active management, you’re paying a premium. But more and more we’re seeing asset managers bring their best ideas into the ETF space without that hefty premium. Sometimes that’s happening, but not all the time. And I like that with this fund. 

So, if you’re choosing between this and an index-based product from iShares, from State Street, from Vanguard that we talked about, you’re not paying that much of a premium.

Chuck Jaffe: And then I said two things. The other, of course, would be yield. And this fund is fairly new. But what are you looking at in terms of yield? Because with any bond fund that’s a concern.

Todd Rosenbluth: Right. So the yield as I last looked is 4.4%. That’s the 30-day SEC yield. That’s as of October. We’re recording this on the first of December, and so we don’t yet have the latest information, but that’s a competitive yield. I think that’s appealing. Obviously, we’re in an environment where the Fed has cut interest rates multiple times in recent months. So, the yields are coming down overall. And there’s been a lot of demand for investment-grade corporate bonds, so the yields for those bonds have come down. 

But I think almost 4.5% is pretty compelling in this environment. And that of course, I believe, is net of the fees. So, the first part of your question earlier impacts the second part of it, so if the fee was considerably higher, that yield might be lower as a result.

Chuck Jaffe: When it comes to corporate bonds, you know again most of this portfolio from what I’ve looked into it quickly is investment-grade stuff, etc. So how much do you want to make an allocation here if you’ve already got something and if you’ve tilted towards high-yield in the past? Because I think there are plenty of people who have bond funds and they add high-yield, they don’t necessarily add corporates.

Todd Rosenbluth: Right. So to me the appeal and one of the use cases for GIGL is that you could have core bond exposure through the Aggregate Bond Index, whether that’s an iShares or Vanguard or State Street index-based product, and you could overweight your exposure to corporate bonds. So as I look at the AGG right now, it is heavily weighted towards Treasuries. It’s nearly half of the portfolio. And then mortgages and agency bonds are a significant chunk as well. 

So, if you wanted to — if you had confidence in the earnings trajectory for 2026 and you believed in the financial health of the companies that were likely to be found inside a corporate bond ETF — you’d want to overweight that sector, and this is a way of doing that with the benefits of an active manager. You did mention it is mostly investment-grade. There is some high-yield exposure. 

Yeah, people will often use a high-yield bond ETF that’s dedicated to high-yield bonds, instead of having the management have discretion to add a little bit of high-yield exposure based on those opportunities. So, this is going to be a safer, more stable alternative to a high-yield bond ETF, but have the benefits of flexibility to own a small slice of that, which I think is more common in the active corporate bond space. It certainly is not common in the index-based world; a bond will actually get removed from the index when it falls below investment grade. And those indices wouldn’t consider a bond that already started at below-investment-grade.

Chuck Jaffe: I also noticed when I looked at this fund that it has about 20% of its portfolio still in government bonds, and not that that’s a bad thing, but given that it’s an actively managed fund and that it’s a new fund, do you expect that that may winnow down a little bit as they get a little longer in the tooth, a little more experience running this fund, and maybe find more things that they want to put their money into?

Todd Rosenbluth: So, there’s — there’s probably twofold on this. I’m not managing the fund; I don’t know all of the insights to it. When a fund is relatively new and growing, it won’t put all of its money to work out of the gate. So, as new money comes in, they can put that to work. There’s also, with the benefits of active management, you can move into cash. 

So, I imagine what is a good chunk of what that is, is there’s money sitting in cash or cash equivalents, to get exposure, to stay invested, you know, in bonds, but in basically cash equivalents. So, that’s the benefits of an active approach, is that you can use the expertise of the management team at Goldman Sachs to help you decide how much exposure to corporate bonds and whether or not to take on more or less risk. I expect as this fund continues to age and grow in size, that we probably will see a lower amount of it, but again, they’ll have the flexibility. That’s a positive to me.

Chuck Jaffe: When you take a look at a fund like this, is this bedrock, because you want to be able to have a sleeve of your portfolio in something like corporate bonds? So, you’re buying this and saying, “I’m going to be committed to this kind of an asset class forever,” or is this a play for now that you might get out of when we see the rate environment change, et cetera?

Todd Rosenbluth: Yeah, so I think this is a tactical opportunity. And if you believe that corporate bonds are going to do well in 2026, and it is the start of 2026 and you want to have an overweight exposure — I’m making the assumption that people have exposure to a broad, diversified index-based or an actively managed fixed income strategy. Again, whether it’s the AGG or it’s a mutual fund that’s actively managed relative to the AGG — and that this is a subset.

This is to overweight corporate bonds. If we get an environment where recession is a concern and people are looking for a flight to safety, a BBB-rated primarily corporate bond ETF is not a safe haven, so I think this is a risk-on way of investing into fixed income without taking on high-yield exposure. People might want to pull that back over time or if the environment shifts, as a result. So, let’s be tactical with ETFs when we can.

Chuck Jaffe: But the tactic now: Lean in, it’s giggle. GIGL, the Goldman Sachs Corporate Bond ETF, the ETF of the Week from Todd Rosenbluth and VettaFi. Todd, great stuff. We’ll talk to you again next week.

Todd Rosenbluth: Thanks a lot, Chuck.

Chuck Jaffe: The ETF of the Week is a joint production of VettaFi and Money Life with Chuck Jaffe. And yes, I’m Chuck Jaffe and I’d love it if you check out my hourlong weekday show by going to MoneyLifeShow.com.

Or you can search for it wherever you find your favorite podcasts. Now, if you’re searching for information on your favorite ETFs, or maybe something like GIGL, which could be your next favorite ETF, check out VettaFi.com, where they’ve got a full suite of tools that will help you out with information on the funds you’re looking for. By the way, they’re on Twitter at @Vetta_Fi.

Todd Rosenbluth, their head of research, my guest, he’s on X as well at @ToddRosenbluth. The ETF of the Week is here for you every Thursday. Make sure you don’t miss an episode by following along on your favorite podcast app. And we’ll be back with another ETF for you to consider next week. Until then, happy investing everybody!

Note: This article was created in part through assistance from AI tools. The content has been thoroughly reviewed and edited by the author. 

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