Core Insights - The discussion highlights the challenges of market timing for investors and introduces the Innovator BE alt ETF, which offers a buffered exposure to the S&P 500, aiming to limit both upside and downside risks [1][3] - The performance of the BE alt ETF is compared to the S&P 500 ETF, noting that while the latter has outperformed in the past year, the former may appeal to investors seeking stability and reduced volatility [1][4] - The importance of understanding investor behavior and risk tolerance is emphasized, suggesting that demographic factors and individual psychological disposition play a significant role in investment decisions [5][6] ETF Market Dynamics - The ETF market has evolved to include more sophisticated products, such as defined outcome ETFs, which provide various strategies to achieve targeted investment outcomes [8][10] - There is a growing trend of using ETFs like BE alt as alternatives to traditional bonds, indicating a shift in portfolio construction strategies among investors [12] - The conversation also touches on the increasing accessibility of sophisticated investment tools to a broader range of investors, facilitated by the ETF structure [14][15] Investor Education and Engagement - Investor education is crucial for the effective use of these new tools, with companies like Innovator focusing on providing resources to help investors understand product functionalities [15][22] - The level of investor sophistication varies widely, with some clients actively engaging in their investment management while others prefer to rely on professional advisors [21][22] - The commitment of firms like Goldman Sachs to the ETF space is underscored, with a focus on enhancing their capabilities and serving client needs in the evolving market [24][26]

Acquisition and Expansion - Goldman Sachs agreed to acquire Innovator Capital Management, a provider of defined outcome ETFs, for approximately $2 billion [1] - The acquisition expands Goldman Sachs Asset Management's (GSAM) product offerings, particularly in actively managed ETFs and defined outcome/income-oriented ETFs [2] Demand and Growth of Defined Outcome ETFs - Client conversations reveal increasing interest in Buffer ETFs and defined outcome ETFs [3] - The defined outcome ETF category, invented in 2018, has experienced a cumulative average growth rate of approximately 60% over the past 5 years [5] - Research suggests the defined outcome ETF category could grow by four to five times over the next 5 years [5] Features and Benefits of Defined Outcome ETFs - Defined outcome ETFs can provide downside protection and a smoother investment experience while maintaining equity exposure [7] - These ETFs can be used to gradually re-enter the market and build a diversified portfolio aligned with specific investment goals [8] - The defined outcome category includes income-oriented strategies for yield enhancement and targeted buffer strategies for downside protection [9] - Innovation in the defined outcome space includes dual directionals and auto callables, offering institutional-level strategies through ETF technology [10][11] Example ETF Performance - The Innovator Defined Wealth Shield ETF (BALT) has more than doubled the performance of the S&P 500 in a one-year period [6]