Goldman Sachs increases its exposure in the ETF space

Market Trends & Strategic Acquisitions - Goldman Sachs Asset Management (GSAM) recognizes the growing trend and client demand for active ETFs, particularly in the defined outcome space [2][3][6] - GSAM acquired Innovator Capital Management to accelerate its growth in the defined outcome ETF market [3][4] - The defined outcome ETF market is projected to grow significantly, potentially increasing by 4 to 5 times over the next five years [7] Product Focus & Investor Needs - Defined outcome ETFs address specific investor needs, such as income generation, downside protection, and growth [6] - These ETFs provide equity exposure with built-in downside protection, fitting into a "risk-aware growth" investment strategy [10] - Investors are increasingly using defined outcome ETFs in their portfolios as part of a critical path of innovation [7] Cost & Operational Efficiency - ETFs offer operational ease and scalability, allowing for consistent portfolio construction across multiple clients [12] - ETF costs are becoming more reasonable and competitive with separately managed accounts (SMAs) that use option overlays [12][13] - The ETF wrapper provides benefits such as intraday liquidity and transparency, enhancing investor comfort [16] Adoption & Usage - Independent registered investment advisors (RIAs) are showing increased interest in actively managed ETFs that target specific outcomes [18][19] - Defined outcome buffer products are used alongside other strategies like covered calls or trend-following equities to manage risk [20] - These products help clients maintain discipline and conviction during market downturns, improving long-term investment success [21][22]