Goldman Sachs makes big bet on ETFs specializing in downside protection
Goldman Sachs Asset Management is making a big bet on defined outcome exchange-traded funds — which use options to help protect against market losses.
TL;DR
- Goldman Sachs Asset Management is acquiring defined outcome ETF provider Innovator Capital Management for $2 billion.
- Defined outcome ETFs, also known as buffer ETFs, use options to protect against market losses.
- These ETFs are attractive to investors seeking income, downside protection, and growth.
- Defined outcome ETFs are seen as a tool to reduce downside risk in client portfolios, used alongside strategies like trend-following and covered calls.
- The adoption of these ETFs is driven by their role in providing risk-managed equity solutions for investors.