Goldman Sachs Asset Management is making a big bet on defined outcome exchange-traded funds — also known as buffer ETFs, which use options to help protect against market losses.
This month, Goldman Sachs agreed to buy defined outcome ETF provider Innovator Capital Management for $2 billion. The deal is expected to close in the first half of next year.
Bryon Lake, co-head of the firm’s Third-Party Wealth team, expects the funds to be a major growth engine for the industry.
“We did this deal with Innovator. We’ve loved that business for years. We’ve known the founders. We’ve known the team. We’re really excited about this space that they’ve invented, the defined outcome space,” he told CNBC’s “ETF Edge.” “Defined outcome, in particular, is a very fast and attractive space to us.”
His reasoning: The ETFs solve particular problems for investors.
